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Electronic procurement system - Essay Example

Electronic Commerce became known as a new business model because of its influence on the power of the internet to offer business opportunities. Through this, different companies can now easily gain access to a worldwide market in promoting their products and services. It offers what is considered a more level playing field to compete with bigger and more financially sound competitors, not only for big companies but also for smaller companies. In a short period of time, the Internet has transformed the traditional business models, and speed up business cycles.

From the usual way of attracting customers to websites, businesses will now then use the internet as a tool to give the customers the information they want, anytime and anywhere. E-Procurement The global electronic commerce transformation Is coming Into a new phase. While the first stage was motivated by the vision and modernization of business-to- customer internet companies, the next phase will be characterized by the leadership and market success of companies who are into business-to-business Electronic Commerce. Business procurement has emerged as one of the important key driver of his EBB(business-to-business) revolution.

E-Procurement Is set to transform the purchasing process within and between buyer and supplier organization by replacing paper-based purchasing with automated system. One reason that e-procurement has that its procurement savings flows directly to the bottom line. As well as providing low-cost process reductions and low-administration costs, effective e-procurement can result in decreased inventories, lower cycle times and improved competitiveness, all of this has an effect of Increased In revenue and profitability.

One area where organizations can use e- recumbent to great effect Is through redefining the procurement process for indirect goods. Inside any organization, the expenses on paper-based purchase requests and orders, documents that needs approval of the management and invoices for direct orders is the best candidate for E-Procurement. 1. 1. 1 General Problem How to design and develop an E-Procurement System for OMNI Global Builders and Development Corporation (GOBOS)?

GOBOS uses a manual system of transaction with their suppliers, wherein canvassing and ordering of construction materials needed for their new building projects is through landlines, fax machine and electronic-mail. It becomes very difficult for them to order or canvass a material especially when they only have a limited number of contacts of their suppliers. There are also some instances that the materials needed are out of stock, so they need to look for another supplier which the materials are available. 1. 1. Specific Problems How to design and develop a module that will help authorized personnel to request for particular items through online? Item requisition is not automated, the project manager will fill-up a Material Requisition Form and submit it to the president for approval through fax or e-mail, and there are some instances that after requesting for a particular items, there will be another items needed for the project. Forms are submitted simultaneously to the fax machine or e-mail. Other Material Requisition Forms are ignored because of inconsistency in the process of sending out Forms.

How to design and develop a module that helps the president approve item requisition easily through online? There are some instances that the requests made by the authorized employees are still pending because there are issues on the availability of the President in approving requests. Thus, approving requests takes a lot of time. How to design and develop a module that will help authorized personnel to post open transactions for bidding through online? Authorized personnel are in charge for canvassing materials.

He uses the traditional way of looking for the materials, searching for an item from the internet and gets the contact number who posted the material. It consumes a lot of time and effort when searching and calling on the telephone to inquire for a material over and over again until he got the highest offer for discount. How to design and develop a module that will help the appliers to create a catalogue that will display the price and specifications of their products through online? Paper catalogs/ brochures are used by the suppliers in giving quotations of each of their items.

They can only send their quotations through fax-machine when asked by the company. Paper works are neither organized nor stored in a filing cabinet, and these are scattered on their workspaces. Therefore, retrieving these papers are difficult to them and time consuming. How to design and develop a module that will help authorized personnel to view/monitor inventories from different projects through online? Employees that are working on a specific project do not have an automated inventory system to monitor their project resources.

It takes time to retrieve specific information about a certain project resource using file cabinets. How to design and develop a module that will help GOBOS to generates reports of their transactions for future analysis or retrieval through online? The task of pulling out history information for analysis purpose from paper-based system requires a large staff and could take weeks. The information could not be obtained easily for analysis. 1. 2. 1 Description of the Current System GOBOS – Suppliers Bidding Process The architect of a certain project will send invitations for bidding to the construction companies.

When the bidding invitation is received, the GOBOS will then hold a bidding event for their suppliers. It is the President, Vice President, Operation Manager or Project Managers that will host the event and will involve suppliers as their bidders. The assigned personnel will call or email each of their suppliers to send their bids through e-mail or fax. These bids will contain the required items with their designated amounts. The bids will be assessed by the host of the event. The bids will be evaluated with the following criteria: 1) Quantity – the estimated number of items the suppliers can provide through the whole project. ) Price – the estimated amount of the items needed for the project. 3) Location (optional) – the distance of the suppliers from the location of the project. 4) Quality – the features and durability of the suppliers items. The host will then call or email again all of the participants to inform them that the event has ended. After this, the Operations Manager or Project Manager will then compile the information and sum it up to use ND include on their bid for their client(architect).

They are having difficulties in inviting suppliers and organizing the event. Contracts, Purchasing Process Once the project is acquired, the funds are given to the President who utilizes and releases the funds for the project. Contracts and, terms and condition of payments are negotiated personally by the suppliers and project managers. Purchase orders are done by the purchaser manually through filling up purchase order form for each supplier in different categories who won the bidding process. It takes a hard time filling up P. O. Arms for each supplier. Purchasing order are sometimes direct buying or through phone. The suppliers will then issue receipts to the Operation Managers depending on their agreement in terms of payments. Back orders are also done or generated manually if the products didn’t pass the minimum requirement of the company as well as if the products are defective. 1. 2. 2 Hardware and Equipment Setup Computer and Internet Computers with internet connection are used when searching for a material and sometimes they used in ordering materials by electronic mail.

Fax Machine/ Telephone They used telephone for purchasing orders from their supplier and through fax shines, they will see that list of materials their suppliers offering. Cellular phone They sometimes follow-up the progression of their projects when the employers are not in front of the computer, and also an alternative way for calling their suppliers. Calculators purchased. 1. 2. 3 Software and Applications being used Internet Explorer (E) A series of graphical web browser used for online searching of suppliers. Autocrat Is a software application for computer-aided design (CAD) and drafting in both AD and AD.

It is used by architects in creating building blueprints on AD or a AD design. Manual Drawing Another way of creating buildings blueprint using sketchpad and pencil. Brochure Also referred to as a pamphlet which is used for comparing materials and prices from different suppliers. 1. 2. 4 Personnel Currently, each position contains only one personnel because GOBOS is a newly established construction company. President As the President of the company, his role is to release the fund for the projects. Vice President He checks the balance of the request.

Operation Manager In charge in several projects like canvassing for materials and purchasing orders. Technical Consultant Decides the project requirements. Project Manager He is in charge in every projects and he can handle 2 or 3 projects. In charge of holding bidding events. Project Engineer Designated by Project Manager on a site. Site Engineer Monitoring for the status of materials and supplies. Estimator Estimates the resources costing and evaluates tabulation. Office Engineer Responsible for documentation of contracts and transactions. Purchaser Issues a purchasing order.

Accountant Recording of plans expenses Secretary In charge of writing Messenger Encoder Book keeper Warehouse Man/ Time keeper In charge on materials as well as checking the punctuality of the workers. . 3 Objectives 1. 3. 1 General Objective To design and develop an E-Procurement System for OMNI Global Builders and Development Corporation (GOBOS)through online E-Procurement is more than Just a system for making purchases online. A properly implemented system can connect companies and their business processes directly with suppliers while managing all interactions between them.

Users may buy direct goods like raw materials such as cement, steel, etc. That forms a part of a finished product. The procurement system is the foremost application, providing organizations with fully integrated, highly efficient solutions that replace the traditionally paper-based, slow-moving purchasing process. Procurement applications shorten the authorization and purchasing process in an organization. It provides features that enables users to request goods, manage suppliers relationships, streamlines buying, reducing purchasing costs, simplifying overhead for company to track its spending.

The procurement system delivers significant business benefits by providing a complete application to automate the acquisition and management of goods and services needed by the organization. 1. 3. 2 Specific Objectives To design and develop a module that helps authorized personnel to request for particular items through online The proposed system will eliminate inconsistency in the process of submitting Material Requisition Forms. It will help employees send a request to the President or Vice president before they can proceed to any transaction they will make such as purchasing orders.

To design and develop a module that helps the president approve item requisition through online. The proposed system will allow the president to see and analyze the Item Requisitions made by an employee. This will be the basis of the president if he will approve or reject the quest. Thus, this will make the process of approving requests easy and convenient for the president. To design and develop a module that will help authorized personnel to post open transactions for bidding through online. The authorized personnel will send invitations to the chosen suppliers through the proposed system.

The invitation will include item specifications and other requirements needed for the new projects. They can easily host a bidding event. To design and develop a module that will help the suppliers to create a catalog that will display the price and specifications of their products through online. Suppliers can easily post their products specification and their prices or send out brochures through the proposed system for easy canvassing of the employees of GOBOS. To design and develop a module that will help authorized personnel to view/monitor inventories from different project through online.

The system can record delivered supplies as well as inventory if changes are made in the project resources. To design and develop a module that will help GOBOS generates reports of their project transactions for future analysis or retrieval. Transactions made by the employees are recorded in the reposed system for future reference such as purchasing orders, back orders and receipts. 1. 3. 3 Scope and Limitation 1. 3. 3. 1 scope Maintenance Suppliers and Employees Registration The employees and existing suppliers are required to register in the system.

All the important information about an employee or supplier will be recorded in the system. User Management The system administrator can change user level access of registered employees. Catalog Management (front – end) The supplier can add products, delete products and alter product specification. Catalog Management (back – end) The system administrator can add, edit and delete item specifications, such as product category and product name. Transaction Requisition Processing Employees send request to the president or vice president before they can create purchased orders.

Order Fulfillment Suppliers send out receipts to confirm orders made by the employees. Reports Transaction Monitoring Transactions made by employees are automatically recorded to the system. Inventory Monitoring Authorized personnel manage the resources of the projects through the system. 1. 3. 3. 2 Limitation Payments The proponents did not include online payment of the company to the system since he transaction of the company involves large amount of money and they already have a financial department to manage the payment transaction. . 3. 4 Methodology of the Study Structured System Analysis and Design Methodology will be used to carry out the full study of the system. Structured methodology is a step-by-step approach, which commences with the investigation of the current system and concludes with a decomposition, breaking down a complex system in disciplined way into manageable units. Technique such as data flow diagrams, entity models and normalization appear in many of the methodologies.