Net Paves Way for Strategic Buying
-- Semiconductor International, 12/1/2000
A sea of change has occurred in 2000, according to a special research study commissioned by Purchasing magazine. Seven in 10 purchasing executives responding say their companies are pursuing electronic procurement. And what's most interesting is that many purchasing departments do not view e-procurement as just another tactical tool, but as a way to move tactical functions out of the department into end-user departments or third-party companies. Jobs will be lost at some of these companies: mostly clerks and some buyers. They will be replaced by purchasing strategists whose jobs will be to develop closer relations with key suppliers and bring their expertise closer to product development and manufacturing operations.More than one in three respondents to Purchasing's study say a major reason for implementing an e-procurement strategy is to shift purchasing personnel from tactical to strategic activities. But for most departments right now, the goal of an e-procurement program is more down-to-earth: Almost four in five say they plan to lower overhead costs associated with purchasing; 68% expect to lower the prices they pay for goods and services; and 56% say they want to improve communications with suppliers.
Of those pursuing e-procurement, 19% expect to reduce employee head counts. Positions targeted for elimination are primarily clerical.
As tactical functions move to other areas, purchasing intends to maintain control of the process. On a scale of 1 to 10, with 1 representing loose control and 10 representing tight control, most survey respondents lean strongly to tight control. The mean response was 7.9. Tight control implies that other departments will be able to order goods only from companies selected by the purchasing department. There will also be dollar limits on orders, and purchasing authority will be specific to certain people.
To read the full study, click here.
