There is an array of Internet-enabled functions available to today’s purchasing function. The four critical functions are described as follows.
e-Sourcing
This component consists of Web-driven functions enabling purchasers to identify sources of supply and includes three main tools: The first, supplier search, focuses on finding suppliers, communicating request for quotations (RFQs), pricing, product quality and volume issues, as well as contract agreement and partnership arrangement. The second, product search, focuses on finding specific goods and services. The third, prepurchasing services, supports two categories of Internet-driven applications:
e-Procurement
The use of the Internet represents a revolution in the way the traditional purchase order is generated and communicated to suppliers. e-Procurement tools include applications for automating the activities associated with purchase order generation, order management, communication, document transfer, and procurement statistics. Among the toolsets are catalog management, requisitioning, bid management, shopping robots, auctioning, PO generation, and logistics. The goal of these toolsets is clear: the streamlining and automation of all purchasing tasks.
Marketplace Exchanges
Exchanges refer to the structure, players, and activities found in today’s business-to-business (B2B) marketplace. There are three B2B marketplace models:
Value-added Services
This function uses the Internet to provide a wide range of supporting value-added purchasing services, including financing, accounts payable billing, comparison shopping, collaborative design and configuration management, promotions and pricing, transportation and logistics, synchronization of supply chain procurement planning, and establishment of marketplace performance benchmarks.