Successful use of e‐procurement in supply chains

Abstract

Purpose: Electronic support of internal supply chains for direct or production goods has been a major element during the implementation of enterprise resource planning (ERP) systems that has taken place since the late 1980s. However, supply chains to indirect material suppliers were not usually included due to low transaction volumes, low product values and low strategic importance of these goods. Dedicated information systems for streamlining indirect goods supply chains have emerged since the late 1990s and subsequently have faced a broad diffusion in practice. The concept of these e‐procurement solutions has also been described broadly in the literature. However, studies on how companies use these e‐procurement solutions and what factors are critical to their implementation are only emerging. This research aims to explore the introduction of e‐procurement systems and their contribution to the management of indirect goods supply chain. Design/methodology/approach: Chooses a two‐part qualitative approach. First, summarizes the results of a benchmarking study that was conducted by a consortium of 12 multinational companies. During the benchmarking process 120 questionnaires were distributed, ten phone‐based interviews were conducted, and finally five successful practice companies were selected and analyzed in detail. Second, draws together the success factors identified in the benchmarking study and maps them against the successful practice companies. Findings: Although e‐procurement has substantially streamlined the procurement and coordination processes for indirect goods, many companies operate multiple e‐procurement solutions. For integrated procurement solutions, the paper recognizes the need of an overall procurement strategy and organization, an alignment of various e‐procurement solutions along the procurement process and the need for integrated system architectures. Companies also have to realize that a no standardized e‐procurement solutions exists and that important success factors are “non‐technical” in nature. Originality/value: This paper presents a first step towards a systematic analysis of factors that may guide companies in the implementation of e‐procurement solutions. Besides providing a direct contribution to the project work in companies it may stimulate further research in e‐procurement success factors.