E-Procurement and E-Supply Chain - Essay Example

E-Procurement and E-Supply Chain Introduction The advent of Internet technology is evolving more and more opportunities to get work done faster and with more quality. The homegrown information system will be in the form of Intranet for the corporate firms to make their own system operating for e procurement and e supply. This can be extended for the further facilities like online contact with the customers who make it internet operating technology. Though there are new facilities and more popularity in using these technologies the firms find new costs and investments to procure these technologies and systems. Chapter 1 1. Survey for making procurement and supply chain system electronic and online 1.1 Necessity of e - business To survey or to study e business transformations, good understanding of complex adaptive systems is required. For example in weather forecasting there will some inaccuracies. Those inaccuracies are reduced by electronic solution that reduces the chaos. Similarly e business will make a company behaviour to be determined by precise laws. The growth of the company results in loss of control over operations. The growth increases complexity and wide range of business needs extra control that is possible by IT solutions. Cathay pacific can use complexity to transform the problem into a solution to bring order in to the increasing business. The increasing business will result in chaos when there is no control. The control can be obtained by enhanced communication, which results in increase of relationship between management, suppliers and customers. The e procurement and e supply chain makes us to better understand the disorder that affects the business and corrects it to do the business in order. Cathay Pacific while making its procurement and supply chain system electronic surveyed the following systems and procedures. 1. Quality of the system 2. Quality of the information 3. The internal support from the organisation and the factors affecting it. 4. Training of the users and the cost effectiveness of it 5. The support from the management for the inter organisational factors 6. Quality in the service 7. the usefulness of the system according to the nature and business of the organisation. 8. The participation of the user The analysis of the data and the points will enable the firm contemplating of adopting these technologies for enhancing efficiency of their network. In this system some of the processes which are done physically will be made online and the necessity of checking the authenticity of the online transactions will be explored. Care must be taken that the persons other than authorised ones will not take the system into hands and control the e procurement and e supply system.1 1.2 Procedures of the online system and making it authentic: The Cathay Pacific company have two types of goods to be procured. The first type is the technical and the second type is non technical. The engineering goods, the spare parts for the machines and planes come under the technical goods. The furniture and accessories used in the office, the items used for providing facilities for the passengers in the plane and the uniforms and other construction material if any required comes under non technical goods. In e procurement the tender process will be done online. They are assessed and orders will be finalised through network. The supplier will be connected in network of the company.1 The recognition of the finalised papers by the supplier is a key for the authenticity and the legality of the network. The electronic signature which is used in the confirmation of the orders to the suppliers will be supplied to them and can be made secret so as to make it unique. For this the electronic signature must be changed from time to time and for every transaction.2 1.2 Increasing the quality of procurement after adopting online system: The e procurement will increase the self-organisation and self-renewal. This is due to the quality of e procurement that involves the ability of adapting and reorganising. The adopting of e business solutions will develop viability and resiliency in increasing business growth atmosphere and create flexible transitory structures. The self-organised e procurement solutions have to make the process fluid and to adopt the structures according to the suitability of the present situation. The network can also be used to increase the quality of procurement and the utility of sourcing. When the sources and suppliers are part of the firm's network the utility will be enhanced as the extent of perusing the proposals will be increased. The management can choose from wide range of the suppliers. The suppliers from whom the management want to procure the goods can be connected in network and the companies and names of the suppliers that are connected in the network must be monitored and revised on yearly basis. 2. Risks inherent in such an approach and recommendations 2.1 Non-linear and feed back mechanism Organisations can be termed as non-linear. The conventional cause and effect is not sufficient to explain the complexity involved in organisation. According to chaos theory a small change can cause a big effect in the final outcome from the system. These final outcomes due to small changes should be positive to make business more cost effective, profitable and productive. If the outcome is negative the outcome may be a uncontrollable self feeding frenzy. To control these negative outcomes the organisations will use feedback mechanism to review how well the systems are doing. The status is compared to the objectives to be achieved. These feed backs need to use the information and this can be provided by the e business solutions quickly and cheaply. The dependence on the coincidence, luck and human weaknesses will be reduced by adapting to e procurement. The risk inherent in the system is that the lack of frame work for conducting e business that involves the e procurement and e supply chain. The lack of goal driven orientation, attitudes, time dependency and understanding can be considered as risks in the e business execution. The needs of the users and the customers will have to decide the goals of the management and objectives of the business. This is due to the fact that the fulfilment of the needs of the users will give the efficiency to the network and addressing the needs of the customers will give the network the success that is needed to make it cost effective. 2.2 Risk in E supply or E services The fulfilment of the needs of the customers also will make the network profitable. But the risk inherent in attaining this goal is about the commitment in the staff who deals with the customer grievances. There is need for the management to make the staff network savvy and make them understand the capacity of the network and the profitability that can be achieved by making it effective. Addressing the needs of the customers and users will dictate the choices in terms of strategies, the requirement of infrastructure and expenditure. The initiative in the implementation also comes under this understanding. 1 The outcomes from the organisation's network and the quality in the services offered by the network will decide the effectiveness of e business. When the company is using the network in a limited manner and did not extend the networking facilities to all the services and departments, their performance will be affected. When the transfer and passage of information was done quickly and if it was easy for the customer to contact the company regarding services, there is a chance for the enhancement in the quantity of the business. 2.3 Effect on profitability The company as larger as Cathay pacific has some immunity towards market fluctuations. This makes staff less competent while the company is earning profit. This incompetence may decrease the capability to face the consequences that decrease profitability. According to jack Welch the former CEO of GE, every company should hire some non conventional experts like that of professionals in e business and IT. They must be protected from the immune systems of the company. The capability of them will make the organisation to transform threats into opportunities. This increases profitability even in adverse conditions. As long as the staff are protected from the immune system of the company, the profitability will be in the risk. The e business solutions will avoid this situation and decreases the risk of decrease in profitability. The first effect it can show on the business is more work done in less time by less staff. This increases the efficiency in the work force and decreases the need of recruitment of the staff for slight increases in the work and business. If the activities of the company are increased, the staff may also be increased but that is due to the new business opportunities offered by the network. The quality of the e business and its outcome are capable of influencing the management's view of the system's success. Using the e procurement and e supply the company can think about cost effectiveness of the system and the managers can on profitability of the system. 1 3. Continuous monitoring for the improvement in e business 3.1 Technology of monitoring The experts in business and organisational capabilities agree that the equilibrium and stability serve as prerequisites for effective organisational design and development. This equilibrium is obtained by continuous monitoring without disturbing the regular activities. When there is change in the equilibrium state, the monitoring authority should be in a position to correct it. It is possible by having relationships and communications with the other networks in the organisation. Monitoring should be neither goal nor the fate of the organisation. It should be a continuous process that should be done according to the needs and behaviour of the company systems. In this condition change creates some tension within the system. The monitoring should be able to lessen the tension on the working conditions thus making the change as inevitable and easy to adopt. This level and type of monitoring can lead to the enhancement of the business of the business activities. The continuous monitoring can be regarding to technology, the facilities and the quality the customers getting from the system and the enhancements required for the improvement of the efficacy of the system according the growing needs. The lists of suppliers that are to be included in the company's network also need monitoring on yearly basis.1 While monitoring the technology, one should keep in view that the up gradation of technology is necessary as Cathay pacific improved its profitability by using the latest technology in 2001. 3.2 Advances in technology From the time of implementation of e business activities till date, number of advances in technology can be recorded. The implementation of the latest technology gave Cathay Pacific an edge than the competitors in the market and it attracted wealth customers who can pay more due to the offering of latest quality services. Offering Internet facilities on board can be considered as one of the latest services. If this implementation proved profitable by attracting number of high paying customers to the company, the company can introduce unlimited Internet connection on the laptops of the passengers as long as they are flying in the plane of the airline. Though this is not a new facility, offering of online facility at the seat of the customer, instead in a special room is a luxury that a company can offer to the customer. This offer can be considered and can be implemented, when the technology process is continuously monitored.1 3.4 To make customer satisfied by adding quality to the services: While monitoring the facilities and the quality of the services, the factor that needs concern is how far the customer was being satisfied by the company. Cathay Pacific is an airline and the users of its end products are the international passengers. The airline can monitor the needs and requirements of the customers regarding travel from one country to another and can avoid them the break journeys they do in reaching the destination. For example monitoring of the passengers' course of travel reveals that in a particular airport the passengers are boarding a flight which is in follow up to the airlines flight. If the following flight does not belong to Cathay Pacific the airline can contemplate to have a flight in that time to the place, where majority passengers go. This is possible by the monitoring the passengers' travel by the inter network. If immediate launch of the flight was not possible, the firm can enter into an agreement with the firm that is offering that service to supply tickets to that flight from the starting point. This is possible by the e business facility the firm possesses. This makes the passengers free of getting the tickets booked two times for two flights. The network of the firm can book a single ticket for two flights. This type of enhancements and improvements can be offered to the end users by continuous monitoring of the changes in the environment and the needs of the customer accordingly. The last one is the monitoring of the efficacy of the system. The efficacy of the system is ensured when the addressing of the customers' needs were maximum and the breakdowns minimum. The continuous working of the network with out breakdowns will ensure the customer satisfaction. The efficacy can be increased by the newer software and hardware that can be used in the network. The introduction of the new software and the hardware that increases the speed and quality of services must ensure increase of customers and even increase in profit and price. When there is need of extra investment, the profitability must be planned in the form of a goal that exceeds the cost of investment.1 3.5 Better management of e-procurement and supply chain system: To introduce all the above-mentioned systems a case management system can be introduced. This must be in a manner of conveying the work to the end user. The management must drive more work and get more returns from the investment. This prefers the retention of the staff rather than retrenchment. The increase of business with the same network ensures the cost 2effectiveness, profitability and more returns of the investment. This reduces the need of the retrenchment. The staff can be retained. After introduction of the networking systems the managements of the successful firms are contemplating the retention of staff to increase the business rather than sending them home. The implementation of the e business systems must ensure the level of instructions of productivity and it must support extra staff to deal with the more business the firm handles. The management must know the needs of the clients by monitoring the environment, before they ask in the form of feed back. Then the results will be delightful because the company will be able to address the needs of the customers before they ask the company. 4. Set of competencies required for the effective management of E-Procurement in Cathay Pacific The developing global economy gives a number of opportunities for the development of civil aviation. The increased business needs more databases, extra monitoring and the need of continuous enhancing of the efficacy according to the above discussed topics. The growth of transportation will increase the aviation requirements also.1 It is better to have agreements with surface transport authorities firms and authorities to transport goods and passengers to the places nearer to the airports from and to the flights of Cathay Pacific operate. This gives an added advantage and competency to the services of the airlines. When the passengers come out of the airport number of them will be new to the region. So when the airline takes the responsibility of transporting them and their goods to the place, they have to go increases the consistency and competence of the airline's services. This can be done with the set of values and systems that are maintained to make the system effective and profitable.2 4.1 To increase customer base with the help of online system Increase of the customer base needs the development of infrastructure regarding technology issues. The infrastructure should integrate the technical to non technical audience. These crucial trends and technologies must be grasped by the managers of the Cathay Pacific to increase the customer base using the online systems. The technological progress in organisational computing is needed that leads to the present business era. This helps in building core blocks of e business infrastructure. This infrastructure is represented by the e business components. The technological infrastructure is essential for effective e business implementation to reach the customers. For this purpose the e business process management should focus on processes within the DOT frame work. The change and the transformation in the business must reach the customers in time. Not only it should make the staff's work easy, it should make customers work easy in getting access to the company's services. The implementation of the e business solutions is capable of increasing the customer base at global level. The framework will result in taking services across the borders of the country in which the country is operating at present. The enhanced communication due to e supply systems must make the company to increase the contacts with the global players. It can make collaborations possible to enhance the services offered to the customers. This results in increase of the business of both the partners and extent of increase depends on the effective use of the technology by the company. This ensures increase in business, if the entire system is cost effective. Instead of arranging the different seats in the same plane for the economy class customers, the airlines can arrange separate flights for highly charged customers and economy class passengers. The investment on the planes which carry high charged passengers and offer more facilities will generally cost more.1 For the above-mentioned activities the airlines must maintain two databases about two types of customers and two types of services offered to them. If the company wants to classify further the services offered to highly paying customers and economy customers, the two data bases can be further classified accordingly. 4.2 Segregation of supply of services: The formulation of set of formulae for the effective and competent use of the e business will make e supply part of the e business solutions effective. Generally e supplies will deal with the services of the firm offered to the customers. The software of the e supply network must differentiate the executive class and economy class facilities and planes. The maintenance of two types of planes to same destination in a same time or in a time with negligible difference must exist. This ensures both type of customers will start and reach their destinations with little difference in time. 5. Conclusion: The e procurement and e supply system involves initial investment and conventional cost effective methods do not work well with it. By introducing this system, the company must concentrate on increasing business and profitability. The methods of adapting e business solutions and making them a part of the company's business need to be monitored closely. This reduces the chaos and tension due to the changes that occur in the system due to new introductions. The time taken for procurement can be lessened and the quality in supplying goods and services for the customers must be increased. This increases both business and profitability and the initial investment will show its results after a certain breakeven period. The internetworking established due to the e procurement and e supply can be used to deliver total quality services and comforts to passengers. The communication between various stations and branches of the firm also improves and it helps in taking decisions fast and secure. References: The references given were of two types Book References Internet references Book References The format of the book references: Author, year, title, series title or genre, publisher, page number 1.James B. Ayers, 2002, Making supply chain management work design, implementation, partnerships, technology and profits, Business economics finance, CRC Press, page number 453. 2. Vijay Luthra, 2006, Info tool all in one business reference, ,medianet limited, page number 57 3. Luiz Antonio Joia, 2002, IT based management: challenges and solutions, Business economics Finance, Idea group Incorporation, page number 146. 4. Bob Brotherton, 2003, The international hospitality industry: Structure, characteristics issues, ,Elsevier, page number 2000 Internet references The internet references were given in the following format Author, year, title, publisher, edition, type of media, date retrieved, website address References: 1 . Author not found, 2004, managing e business, , ,electronic, 28-11-06, http://www.palgrave.com/pdfs/1403936048.pdf 2. News Report, 2006, Sheffield IT company doubles conveyance activity for North legal firm, UK corporate solutions, ,electronic, 27-11-06, http://www.ukcorporatesolutions.com/news/one_news.aspIDNews=4616 3. O.B.Aliu, 2005, Common African civil aviation policy, Aviation and allied business publications, ,electronic, 27-11-06, http://www.aviationbusinessjournal.aero/journal/102006JL06.htm 4.Author not mentioned, 2006, E-PROCUREMENT AT CATHAY PACIFIC AIRWAYS: E-BUSINESS EVALUATION , ,electronic, 27-11-06 5. Summary paper, 2001, Business e commerce and e market places, TRP. ,electronic, 28-11-06, http://www.trp.hku.hk/tif/papers/2001/feb/0102summ.pdf 6. Thomke, Stefan; Nimgade, Ashok, 2006, case, Primis online, , electronic, 28-11-06, http://www.primisonline.com/cgi-bin/POL_program.cgiprogramCode=HBPOC&context= 7. Theresa W. Carey, 2001, Accounting Software: It's a Buyer's Market, CFO,com, , electronic, 30-11-06, http://www.cfo.com/printable/guide.cfm/3036035 8. ISB report, 2006, professional programmes, International business School, ,electronic, 1-12-06, http://www.ibs.ac.im/pdf/Prospectus%20-%20Professional%20Programmes.pdf 9. author not mentioned, 2006, e procurement, CIOL, ,electronic, 1-12-06, http://www.ciol.com/content/e_ent/procurement/ 10. author not mentioned, 2006, e procurement, IBM, ,electronic, 1-12-06, http://www-03.ibm.com/procurement/proweb.nsf/ContentDocsbyTitle/United+Statese-Procurement 11. author not mentioned, 2006, e procurement, pacific gas and electric company, ,electronic, 1-12-06, http://www.pge.com/suppliers_purchasing/purchasing/e_procurement/ 12. Adam Jacob, 2001, E-procurement's Catch 22, conspectus, ,electronic, 1-12-06, http://www.conspectus.com/01junpc/0106a5.asp 13. Dale neef, 2001, E procurement- From strategy to implementation, Financial time prentice hall. 14. Alec Nevalainen, 2006, The E-Business Dictionary: EDI, Supply Chain, and E-Procurement Terminology, Amazon.com, ,electronic, 28-11-06, http://www.amazon.com/E-Business-Dictionary-Supply-E-Procurement-Terminology/dp/0971320322 15. Yau, Grace Chui-wah., 1999, Effectiveness of Intranet: IntraCX in Cathay Pacific Airways Limited / Yau Chui Wah Grace, Hong Kong : Dept. of Information Systems, City University of Hong Kong. ,electronic, 27-11-06, Read More