Boeing Australia E-Procurement

Boeing Australia Limited E procurement administrator Summary As Russell Menere, I recommend the management of Boeing Australia Limited to obey the footsteps of Boeing US to adopt and implement terms effective e-Procurement placement, which can be interfaced with the legacy information organisation as we urinate IT infrastructure in place that is our core strength. Through e-Procurement system we can improve redundancies in the business sue and operations, gain in productivity by upgrading procurement paradees. Cost savings by reducing processing clipping, rationalization of a large number of BAL suppliers and maintaining relationship with mainstay Suppliers.Investing in an e-procurement system BAL would hear short term improvement tool that would simplify the procurement process across different di view and support complex interfaces with suppliers. We can expand our scope to include reverse sells tool as well. Key Assumptions I would assume that the management has app roved a reasonable amount for the cost of setup, implementation, training, interface and support of e-Procurement system with the BAL legacy system. Assuming that the BAL key suppliers have no problems with the changes to the procurement processes.Statement of issues The main issue is processes. There are redundancies in the business process low productivity and high processing time in procurement processes, a large number of BAL suppliers and relationship with Key Suppliers is not maintained. BAL is having budgetary constraints to invest in an expensive new system and set up complex interfaces within inter organization and with suppliers. living legacy system is having large information system across the organization. A list of possible barriers is as listed below Barriers to e-procurement Upper Management resist / Lack of Leadership Other Competing Initiatives Resistance to change Lack of a widely accepted solution Magnitude of Change Complicated procedures and widen relationsh ips Lack of technical expertise Security in the process data transmission to the wrong person Confidentiality of information unauthorized viewing barroom of tampering with documents -changes to documents Different national approaches to e-procurement Proof of intent electronic signatures clearness of sender and tendered information Enforceability of electronic recoils Information technology investment cost Cost of assessment of systems to find correct system to fulfill tasks inwrought Compatibility External Compatibility Investment in compatible systems Reluctance to buy-into one complete system The major impediment is the Size of Company as the enjoin categories of commodities should have a volume enough so that it looks attractive to the suppliers for vent in to an e- auction off and going in to long term contract. These vendors are to be given a visibility of the order size during the contract check so that they can weigh their options.Criteria The Boeing Companys vis ion is construe according to the organization of the various divisions who are committed to the corporate vision by keeping customer as center and cost reducing with a cracking quality. Reverse Auction A reverse auction is an electronic auction where buyers enter requirements, and Suppliers bid to provide the required goods and services. It is conducted in real-time, And bidders see the offers of competitive bidders but no the names of the other Bidders. The process prices move downwards as the auction progresses.The consortium of vendors participating in the e-auction process should be prescreened and graded on an index point master on various attributes like woodland, Delivery timelines, financial rest, Competitors, market standing and other Customer feedback. The steps in a reverse auction Define the event. Prepare suppliers. Develop item specifications and auction parameters. Conduct an RFQ period. be active the auction. Potential Costs and Benefits The major costs involved are in the main under the following heads 1. Software cost. 2. E-procurement platform hiring fee. 3. Training Costs to all told relevant employees and vendors. . Vendor classification and grading and appraisal cost. 5. RFQ and RFA clarification with vendors meter cost. 6. Administrative costs. 7. conviction involved in analysis and award of contract. 8. caliber check mechanism cost. Benefits Process cost savings (Tender / Purchase Process) wait on / Material / Product Cost Savings. Reduced Waste Transaction government Cost Savings Reduced Administration Increasing Profit Margins strategic Cost Savings Enhanced Inventory Management Decrease in Costs done reduced staffing levels Shortened Overall Procurement cycles/seconds/second Times Shortened Communication Cycle Times reducing in time through greater transparency(Less objections) Reduction in Evaluation Time Reduction in Time through improved internal workflow Reduction in purchasing order fulfillment time Redu ction in time through increased visibility increase Quality through increased competition Increased Quality through Benchmarking (Market Intelligence) Increased Quality through increased visibility in the supply mountain range Increased Quality through increased efficiency. Increased Quality through Improved Communication Gaining Competitive Advantage Recommendations In such competitive scenario E-procurement is apt solution for Boeing Australia.I would recommend making relevant very much of commodities focus under various categories and offered to relevant set of vendors to give them a good business perspective and gain competitive advantage to the company during the contract period. All the bigger $-value lots to be awarded under e-auction and smaller lots can be awarded through open auctions for low risk items. An Online system should be aligned with vendor systems can be developed to process in time orders and payments. These steps will provide Boeing reduced cycle times, det ermine market price of goods and in turn reduce boilersuit cost of goods.