Procurement power at work

sourcepilipinas.com

It’s easier to react than to respond.

Some attribute this to human weakness, while others merely shrug their shoulders and leave to authorities the weight of resolving all economic and/or political headlines. Yet, there are Filipinos who have opted to brave the challenge. Opinion-wise, I’d rather have an honest leader proactively identifying flaws that need to be resolved than one who adds a different color to hide the real situation.

Similar to any business marketplace, electronic or e-Marketplaces are not exempt from talk. While the "fiscal crisis" issue is still abuzz within the business community, several have retooled counter-approaches to protect their main operations – this time, not single-handedly, but more on a partnership and/or community level. Here are suggested routes where one need not carry the entire load:

• With the new wave of spiraling crude oil prices affecting raw material purchases, for example, e-Marketplaces help enterprises develop alternative supply sources. Better still, more opportunities are presented, opening additional channels to tap substitute materials that complement and ensure continuity within the overall supply chain. By participating in horizontal exchanges, buyers are more able to implement sensitivity analysis within their forecast short- and long-term supply and demand trends, enabling them to respond better to volatile raw material prices and product availability. Perceived "gaps" within agreed contracts are also better rectified in a manner that lessens abrasions for buyers and suppliers alike.

• e-Marketplaces also assist in remedying the amount of time required in processing what we usually refer to as "trivial-many" or "small orders." Commonly referred to as maintenance, repair and operating (MRO) items, these include anything that does not go directly into an organization’s product and/or service. Often, these are referred by purchasers as "nuisance" items, as they are typically difficult to track. In fact, the only way most purchasers know when to order MRO inventory is when they receive purchase requisitions from end-users. Within e-Marketplaces, MRO classifications are further streamlined. Rather than deal with thousands of MRO suppliers, enterprises deal with a handful of qualified distributors where major contracts are awarded. By aggregation, qualified MRO suppliers in e-Marketplaces extend price reductions, provide as much as 24-hour delivery support for regular orders, and minimize the hassle of paperwork. As soon as aggregated requirements are negotiated online, users simply point and click on the items they need through buyer-specific catalogues available. Administrators of e-Marketplaces, meanwhile, track delivery and assist purchasers in obtaining a better view on how to control inventory.

• Production support items are also popularly run through e-Marketplaces. These include packaging used to ship final products, directly supporting an enterprise’s operation. Through SourcePilipinas’ blind and/or sealed auction approaches, specialists decide on the merits of screening appropriate packaging partners by matching their price quotes with the quality of products that prevent damage at the least cost. More significantly, prediction of future packaging requirements are readily matched based on anticipated production schedules, while requirements for floor space are reduced.

• Also, e-Marketplaces pay attention to the right mix and selection of qualified capital equipment or capex-related suppliers both at home and abroad. Here, indirect and direct charges can zoom up should buyers switch suppliers in the middle of a large-scale project, or dispose of capex-related items after delivery due to dissatisfaction. Through e-Marketplaces’ extensive external linkages, however, these incidents are reduced, if not avoided, to ensure that projects are completed based on a required timeline.

In general, decision-makers have the option to rely on committed e-Marketplace partners that do not require the added fixed costs to lessen the brusque and often, painstaking effects of belt-tightening. Remember, problems are situations matched with appropriate solutions. Situations get worse if more are skewed on the problem. The reverse happens if you gear up for solutions and learn to share the load within the procurement community. In the end, the outcome rests on the view that we take. As re-emphasized, I have always believed Filipinos could weather the storm.

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Grace Crisostomo-Cerdenia is the general manager of SourcePilipinas.com and chief operating officer of 2TradeAsia. For your comments or queries, e-mail her at [email protected].