Ev. 1

Electronic Procurement – A Big Step Towards Transparency and Efficiency

The Asian Development Bank’s Perspective

Jeff Taylor, Senior Procurement Specialist

Ev. 2

Electronic Procurement, Its Origins

Its not new: Materials Requirements Planning

(MRP) 1960sElectronic Point of Sale (EPOS) 1980sOrganization for Data Exchange by

Tele-Transmission in Europe (ODETTE) 1984

COVISNET (US Automotive/Oracle) 2000

Ev. 3

It’s Not a Panacea

The pyramids were built without it

It offers little transactional value for CAPEX

Toyota a global procurement benchmark using Kanban – paper

Rubbish in Rubbish Out. Computers Cannot Think

Ev. 4

There are Negatives

It passes on transaction costsRequires power asymmetry to

impose It does not measure absent

suppliers It can be used to limit

competition

Ev. 5

Seven Types of E-Procurement Trading Models

1. EDI Networks, few partners, simple transactions, batch processing.

2. Business to Business Hubs, simplest e-catalogue, complex requisition and payment. 1T1 or MTM.

3. Corporate Procurement Portals – such ADB’s CMS

Ev. 6

Seven Types of E-Procurement Trading Models

4. First Generation Trading Exchanges distributors/manufacturers aggregation

5. Second Generation Exchanges integrated requisitioning, price and product discovery

6. Third Generation Trading Exchanges, real-time fulfillment. Information for inventory

7. Industry consortia and the virtual factory

Ev. 7

E-procurement Benefits

Pareto optimal, 80:20 Rule (main private sector driver), TCE

Transparency – (main public sector driver)

StandardizationData capture and spend

analysisE-government and e-

governance

Ev. 8

E-procurement Challenges

•The Business Case•Standardizing specifications•Line item level, contract or unit?•Commodity Coding• In-house or out sourced project development?

•Functional Design•Regulatory and Legislative Environment

Ev. 9

E-procurement Challenges

Best Fit or Custom BuildFinancing – supply side or

demand? Integration with Existing

SystemsPurchasing powerOSFederal Vs State

Ev. 1

0

ADB Supported Initiatives

Its own Consulting ProcurementCMS

E-GEPS in the PhilippinesNCB Procurement in IndiaNCB Procurement in IndonesiaThe Asia Pacific Procurement

Initiative