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Internet-Enabled Purchasing Components

There is an array of Internet-enabled functions available to today’s purchasing function. The four critical functions are described as follows.


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:

  • Decision support tools for spend analysis, item rationalization (standardization), contract management, and supplier monitoring and improvement
  • Negotiation automation tools to automate the negotiation process, electronic request for proposals (RFPs), and electronic auctions


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:

  • Buyer-driven e-marketplaces used to optimize internal requisitioning and procurement activities
  • Vertical e-marketplaces used as hubs or clearinghouses, servicing the search and procurement needs of a single industry
  • Horizontal e-marketplaces that use technologies ranging from simple portals to sophisticated collaboration hubs to enable multi-buyer/multi-supplier interaction and collaboration

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.

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