TRAINING IN PURCHASING AND SUPPLY CHAIN MANAGEMENT

PURCHASING AND INFORMATION TECHNOLOGY (IT):

The purchasing process is not simple and straight forward, it’s complicated, the manual purchasing
process is very labour intensive, time consuming and involves a lot of paperwork. On the other hand,
when you use technology in your purchasing process, it saves you a lot of time, it makes the whole
process much simpler and Hussle free. These are just a few of many advantages of levering
technology in the purchasing process.
Trending social network sites and other open-sourcing programs make it challenge sometimes to
keep up with the many market changes. IT helps purchasing streamline processes, increase
information, and obtain access to necessary data.
Many firms purchase business-to-business e-commerce buy-side software systems from firms such
as Arriba, Commerce One, and PeopleSoft. These systems help to streamline the purchasing process
and facilitate communication internally and externally. Many of these systems also include database
technology that provides timely and accurate input to supply management for strategic planning and
tactical activities.
The relationship between purchasing and IT is changing as quickly as the technology to effectively
source products and services.
Advantages Of Using Information Technology:
Technology has a revolutionary effect on different matters of our life. The commercial sector is at
the top of beneficiaries of the latest technologies. Many organizations take advantage of information
technology to reduce costs and enhance their profits.
There are many advantages to using information technology, too many to list them all here.
However, some of the greatest advantages include globalization, increased market size, declining
costs, increased communication, increased job market and extended hours.
1. Improves Efficiency And Speed.
Technology can help you increase the efficiency and speed of your purchasing process significantly
resulting in time saving. Important tasks can be dealt with using technology instead of getting a
person to do them. This reduces the work of time to handle more complex tasks in the purchasing
process.
2. Decreases The Average Cycle Time.
With a manual purchasing process, your team likely spends most of the time drawing up and
reworking contracts. However, with the help of technology, you can use online purchase approvals
and order templates. You can easily make minor required changes and create contracts that are
suitable for your company. You can leverage technology to store your existing contracts and re-use
them whenever needed rather than working on a new one every time.
3. Eliminates Manual Documents Storing System:
A manual purchasing process often leads to a lot of paperwork and those papers eventually pile up. It
can be difficult for your purchasing team to search for and track a single expense document. Also it’s
not easy to organize and store these papers.
That’s why it is important that you leverage technology and completely eliminate your paper based
storing system.
4. Makes Your Purchasing Process Transparent:
With the help of technology, you can conduct audits effectively. An audit will give you 360 degrees
visibility, and increase the transparency of the whole process.
This will make sure that there are no misuse of your budget and that it’s spent on necessary and
relevant services and / or products. With the help of technology, you can measure your KPIs more
efficiently and effectively.
5. Streamlining Processes:
Information and communication technology helps in streamlining processes, it increases information
and helps to obtain access to necessary data, many firms purchase business to business E-commerce
buy side software systems from such firms as Ariba commerce and People soft. These systems help
to streamline the purchasing process and facilitate communication internally and externally, many of
these systems also include database technology that provides timely and accurate input to supply
management for strategic planning and technical activities. The relationship between purchasing and
IT is changing as quickly as the technology to effectively source products and services.
Copyright of Highimpact Institute Academy.
6. Effective Information Management:
Effective information management can help ensure that a firm meets the logistical needs of its
customers.
The logistics managers are responsible for these activities and time accurate flow of meaningful
information enable them to successfully implement the same. The logistics activities assist
significantly in meeting customer needs and an accurate relevant information system can facilitate
the logistics mission. Logistics information systems combine hardware and software to manage,
control and measure logistics activities that occur within specific firms as well as across the overall
chain.
7. Digital Order Processing System:
The order processing system is the nerve center of the logistics and supply chain system. A
Customer order provides the communication message to set the logistics process in motion. The cost
efficiency of the entire communication can result in loss of customer or excessive transportation,
inventory, and warehousing costs together with possible manufacturing inefficiencies caused by
frequent changes in the production line.
The order processing and information systems form the foundation for logistics and corporate
management information systems.
Leading – edge organizations are utilizing computers extensively to support logistics activities;
world class logistics practices include the use of logistics information systems as a key to
competitiveness.
8. Competitive Advantage.
Computer-based decision support systems (DSS) support the executive decision-making process in
logistics and supply chain management. Other benefits in include systems such as quick response
(QR), just in time (JIT) and efficient consumer response (ECR) are integrating a number of
information-based technologies in an effort to reduce order cycle times, speed responsiveness and
lower supply chain inventory.
9. Data Collection:
Data collection is a systematic process of gathering observations or measurements. The procurement
department faces many challenges in the procurement process, and data collection is one of them.
Usually, after generating the demand and approval of purchase requests, procurement personnel have
to contact various suppliers. If they must find the suppliers from scratch, it is a tedious and time-
consuming process.
Information technology helps collect the data in a centralized platform (ie database) that aids in
analyzing to analyze the supplier behavior.
It also enables the procurement officers to compare prices, quality, payment terms, and many other
criterions to select an efficient supplier.
10. Fast Connectivity Through Web:
Today companies are restructuring their information on websites, business to business requirements,
and online customer and supplier linkages.
ERP systems, purchasing databases and data warehouses, electronic data interchange (EDI), business
to business electronic commerce are recent development which applied in logistics and supply chain
management.
Many organizations today effectively take management of purchasing and supply chain activities as
a prerequisite to the achievement of overall cost efficiency and as a key to ensuring their ability to
price their products and services to meet and beat the competition. Information technology is being
used by leading-edge firms to increase their competitiveness and develop technologies that have
been traditionally regarded as key strategic resources and expertise in these areas is now thought to
be the most valuable and essential of all corporate resources.

Therefore, we can conclude that there is a need for effective management of corporate information
systems and technologies which are highly relevant and most important to purchasing and supply
chain management.
Information technology has a significant impact on the process of procurement and purchasing. The
technology helps collect the data, but it is also much effective in reducing errors by saving all the
necessary information electronically.

SELF ASSESSMENT:
1. List at least Two (2) advantages of using Information Technology (IT) in
Purchasing and Supply?
2. What is Data collection?
3. State One way in which Effective Information Management can help in
purchasing and Supply.

Thank you.