How E-Procurement works


Inspite of many variations, the most common e-procurement model involves an intermediary service provider or a host who links buyers and sellers in an interconnected supply chain using a web based e-procurement application.
The host manages transactions, facilitates communication, aggregates and maintains catalog content, and provides the general infrastructure for the virtual marketplace.

Through this network, buyers may compare products from multiple suppliers in a single electronic catalog or check on an itemís price and

availability in real time before electronically creating a PO.
Once a PO is approved, also electronically, itís sent to the supplier via the hostís Web portal. 

This same Web portal
enables suppliers to automatically return real time PO status.

After an order ships, buyers can process tracking and receiving functions right from their workstations. Creating an invoice and authorizing


payment is handled electronically through the same portal as well !

Beyond merely automating shipping and receiving tasks, however, e-procurement offers far more process improvements and innovative options for streamlining business operations and maximizing strategic initiatives.

E-procurement enables access to global  suppliers, real time communication between buyers and suppliers, electronic payment of invoices, and assignment of logistics freight rating and routing.

E-procurement has also spawned creative new business models such as auctions for suppliers to sell excess inventory, reverse auctions where suppliers bid to fulfill a buyerís order, and trade exchanges where buyers and sellers simultaneously bid for each otherís business.