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Electronic Procurement – A Big Step Towards Transparency and Efficiency

Electronic Procurement – A Big Step Towards Transparency and Efficiency . The Asian Development Bank’s Perspective Jeff Taylor, Senior Procurement Specialist. Electronic Procurement, Its Origins. Its not new: Materials Requirements Planning (MRP) 1960s

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Electronic Procurement – A Big Step Towards Transparency and Efficiency

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  1. Electronic Procurement – A Big Step Towards Transparency and Efficiency The Asian Development Bank’s Perspective Jeff Taylor, Senior Procurement Specialist

  2. Electronic Procurement, Its Origins • Its not new: • Materials Requirements Planning (MRP) 1960s • Electronic Point of Sale (EPOS) 1980s • Organization for Data Exchange by Tele-Transmission in Europe (ODETTE) 1984 • COVISNET (US Automotive/Oracle) 2000

  3. It’s Not a Panacea • The pyramids were built without it • It offers little transactional value for CAPEX • Toyota a global procurement benchmark using Kanban – paper • Rubbish in Rubbish Out. Computers Cannot Think

  4. There are Negatives • It passes on transaction costs • Requires power asymmetry to impose • It does not measure absent suppliers • It can be used to limit competition

  5. Seven Types of E-Procurement Trading Models • EDI Networks, few partners, simple transactions, batch processing. • Business to Business Hubs, simplest e-catalogue, complex requisition and payment. 1T1 or MTM. • Corporate Procurement Portals – such ADB’s CMS

  6. Seven Types of E-Procurement Trading Models • First Generation Trading Exchanges distributors/manufacturers aggregation • Second Generation Exchanges integrated requisitioning, price and product discovery • Third Generation Trading Exchanges, real-time fulfillment. Information for inventory • Industry consortia and the virtual factory

  7. E-procurement Benefits • Pareto optimal, 80:20 Rule (main private sector driver), TCE • Transparency – (main public sector driver) • Standardization • Data capture and spend analysis • E-government and e-governance

  8. E-procurement Challenges • The Business Case • Standardizing specifications • Line item level, contract or unit? • Commodity Coding • In-house or out sourced project development? • Functional Design • Regulatory and Legislative Environment

  9. E-procurement Challenges • Best Fit or Custom Build • Financing – supply side or demand? • Integration with Existing Systems • Purchasing power • OS • Federal Vs State

  10. ADB Supported Initiatives • Its own Consulting Procurement • CMS • E-GEPS in the Philippines • NCB Procurement in India • NCB Procurement in Indonesia • The Asia Pacific Procurement Initiative

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