During the past two
decades, companies have adopted different strategies to rationalize and
consolidate their supplier base. In many cases, the supplier rationalization
programs have created a single sourcing
strategy for many commodities. This strategy has enabled companies to build
stronger and more collaborative relationships that deliver a range of benefits,
including:
- Improved bargaining power to reduce costs
- Automatic Evaluation of Supplier Performance
- Maintenance of supplier score Card
- Decreased effort to track supplier performance and manage relationships
- Improved innovation and design collaboration
- Easy access for Buyer and Suppliers
- Transparent Environment
- Improved plan synchronization and information exchange
- Improved supplier
Now a day’s many companies
have been able to gain a competitive advantage by enhancing the capabilities of
their supply chain via using the eProcurement technology. The realization of
cost savings has been further enhanced by eSourcing management. This eSourcing
technology has revolutionized the Procurement culture globally.
eSourcing globally has
contributed significantly to cost reduction objectives, it has extended the
length of the supply chain and has made companies to gain more cost saving by
sourcing through the countries where goods are available on cheap rate. But
this also brings supply chain risks that companies must now manage which are as
follows;
- Lead Time Variability
- Availability of Goods
- Quality Risk
- Financial Risk
- Vendor Liquidity
When evaluating the use of
global sourcing many procurement managers have become very concerned about
their risk exposure and are seeking options to reduce risk in Supply Chain
process. But eSourcing has surely empowered companies to bring cost savings,
transparency, Audit Trail, fully automated process for their supply chain
department.