part

below.

Explanation:

How to approach this

question:

- Your response will need 5 definitions. For 25 points that means 5 points per section so think about

the level of detail you’ll need to include. It would be 5 points for electronic system (i.e. your

introduction and conclusion), and then do a paragraph on each of the technologies. In the

description you could talk about why it’s used and the advantages, and give some examples if you

know any.

- Definition of electronic system – a system which uses some form of technology and automates a

procurement process than would otherwise have been completed manually.

- E-Requisitioning – a way of ordering goods or services. Includes the use of integrated ordering

systems such as: ERP/ ERP II / MRP / MRP II

- E-Catalogue- an electronic display of what goods can be ordered. A simple example of this may be a

supplier displaying the goods they offer on their website and the prices to purchase the goods.

- E-Sourcing – this involves the early stages of the tender process- using an electronic portal to find a

supplier and / or conduct a tender exercise.

- E-Payment – the P2P part of the cycle (procure to pay) – may involve electronic POs and Invoices,

BACS, CHAPS and SWIFT payment systems, and the use of Purchasing Cards

Example essay:

Electronic systems, commonly refered to as E-procurement, is the business-to-business or business-

to-consumer purchase of goods or services, typically using the Internet or other information/

networking systems such as ERP systems. It has developed in the past 20 years as technology has

improved and replaces time-consuming manual processes and is now considered the ‘norm’.

Electronic systems and e-procurement can be used throughout the entire supply chain- not just

between a single buyer and supplier. Examples of electronic systems including the following:

E-requisitioning

This is often used in manufacturing organisations to order raw materials. An electronic ‘bill of

materials’ is created and stock levels are automatically updated. As materials get used and a pre-

determined level is reached, this triggers a new order which is placed via an e-requisitioning system

such as MRP. It is a technological version of the traditional kan-ban (2 bin) system. E-requisition tools

are often cloud-based. It helps buyers simplify the buying process, track orders and provides higher

levels of visibility on spend. The main disadvantage to this technology is that it requires technology

interfacing between the buyer and suppler, which may be expensive.

E-catalogues

This is a digital or online version of a catalogue- a document that details what you can buy and at

what price. There are two main types – buy side catalogues and sell side catalogues. A buy-side

catalogue is an internal system used by a buyer which hosts a list of pre-approved suppliers from

whom purchases can be made. It may include details of commonly bought items and the prices. The

use of this reduces maverick spending and ensures consistency in purchases (e.g. whenever

lightbulbs need to be ordered, the same lightbulbs are ordered so the office lighting is consistent). A

sell-side catalogue is provided by a supplier and details what they offer- it often includes prices, any

discounts for bulk buying and may also let buyers know of availability (e.g. the website may say only

two items remaining). This may be as simple as a price list on their website, available for anyone to

view.

E-sourcing

This is a tool that helps a buyer find the most suitable supplier. Examples include e-tendering

websites where a buyer can host a competition to find a supplier. E-auctions are also a type of e-

sourcing tool. The tool (often a website) hosts all of the tendering documents and allows for buyers

and suppliers to communicate during the tender process (for example if there are any clarifications

needed on the specification). Using this tool allows for transparency and equal treatment, but also

saves time in completing the tender exercise. PQQs can be automated and some e-sourcing tools

include the use of Artificial Intelligence which can ‘read’ tender submissions and automatically

exclude suppliers who do not fulfil the required criteria.

E-payment technologies

These are methods to pay for goods and services that replace the need for cash and cheques.

Examples include online bank transfers, electronic Purchase Orders and Invoices and the use of Pre-

Payment cards. These act like credit cards for employees to use when they need to buy supplies. For

example, if you have a maintenance team that frequently need to purchase low-value items like

screws and paint, you could issue the team with a Pre-Payment card with a certain limit (e.g. £500/

month) so they can buy what they need. The company will then automatically be sent a monthly

invoice for all of the purchases. This saves time from having to issue the maintenance team with

petty cash for the purchases and allows for greater visibility over spend (e.g. how many screws are

typically bought per year?). Another typical use is for staff travel.

In conclusion, procurement teams benefit significantly from leveraging electronic tools, including e-

requisitioning, e-catalogues, e-sourcing, and e-payment technologies. The adoption of these

electronic tools brings about various advantages that enhance efficiency, transparency, cost-

effectiveness, and overall effectiveness in the procurement process. Moreover E-procurement tools

has helped develop the procurement function into a professional and respected function and allows

for a more pro-active rather than reactive approach to purchasing.

Tutor Notes:

- Fun Fact! In the public sector, it is mandated that electronic systems are used in procurement

(Public Contract Regulations 2015) as this helps to achieve the objectives of transparency and equal

treatment. Where manual systems are used, it is easy to manipulate the tender process. For

example, a buyer could read some tender submissions before the deadline for submission and no

one would know, but with an electronic system this is impossible as it locks evaluators out until the

deadline has passed and all bidders have submitted their responses. (note PCR 2015 is being

replaced in 2024- details are still TBC but the above fun fact will still remain in the new legislation-

they’re definitely still going to make it compulsory).

- You could also mention the names of systems if you know any. For example, e-sourcing tools include

MyTenders.com and Delta E-Sourcing. PO / Invoice systems include Sage, Xero and QuickBooks.

- The question doesn’t ask for advantages of using these technologies but you could mention this in

your answer. Just be sure that this isn’t the focus of your response- the question asks specifically for

you to DESCRIBE the systems so detailed s and examples are where you will secure the most points.

- p.108