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CHAPTER 2: ELECTRONIC PROCUREMENT
2.3 Limits, the case Welsch 18
Beside the unquestionable advantages of cost that gush from the use of instruments web-based in the phase of supplying, they exist sure of the circumstances that they render I use it of the web highly counter-productive in the definition of the supply relationships. The limits that render the resource inefficient to determine instruments to you of Internet in the purchase of raw materials
are to lead back to some, which can carry to a inasprimento of the relationships with the own suppliers.
Necessary E' therefore, from part of the administration centers them, to analyze of time in time with attention, the possible consequences to which could lead the use of a determined instrument web-based in the purchase of the raw materials of which it needs the company, holding in consideration the mechanisms cause-effect that could gush.
The limits of the Internet Exchange are therefore riconducibili to taking place themselves of some that tramutano the advantages of cost (of every type) of the short period, in losses of efficiency and/or inasprimento of the relationships with the suppliers in the future.
The circumstances to hold in consideration in the choice of the supplying solution more work them are therefore following:
One first classification of the assets of which the company it has need for
an effective management of the production is to lead back to the level of participation of the good in consideration to the typical activity of enterprise.
- Type of the assets acquires to you.
The assets provision to you can in fact be classify to you in direct or indirect assets.
First they participate directly to the carried out characteristic activity from the company and solos to times answer to of the universal standards that substantially assign to the name and address and the level of integration with the supplier a role of flat
second, like in the of supplying of the indirect assets.
In this circumstance in fact, the advantages of cost are materialized in particolar way deriving from the Internet Exchange.
Advantages deriving from the transactions spot gushed from the applications of the e-procurement transazionale, which slowly confer a role of second to the quality of the relations with the supplier.
Necessary E' therefore, to more choose the second shape of supplying appropriated to the good acquiring.
It is not rare in fact that the enterprise you abandon of the constructive relationships with the own suppliers strategic in order to go to search of the advantages of cost deriving from the use of instruments (like the auctions, the marketplace...) that badly they are conciliated with the necessity to establish relationships collaborated to you and long-lasting with the same suppliers, necessary in the case of the finding of direct assets.
Assets that need of mechanisms of relational type, for the
strategic of the raw materials directed to acquire.
In the fields to high technological content, in particular, it becomes of fundamental importance to create of the synergies
with the own suppliers, that they allow to put in condition the customer for have using of the raw materials or the just service at the just moment.
- Type and level of customizzazione prodotto/servizio of relation with the supplier.
This need of personalization of the good to provision is had in a generalized manner in the case in which the supply it turns out complex and al same time, has one strongly importance in the creation of value for the customer who from there draws benefit.
A e-procurement of put into effect relational type through applications of Supply Chain management as systems ERP (Enterprise Resource Planning) extended or the Corporate Portal, would turn out particularly effective in the management of the supply.
E' to emphasize that Internet does not change the supplying models, but facilitates them.
The web it allows to find new solutions, new channels, but however the procedures remain the same ones, and as an example, in the case in which the entrepreneur it has already for a long time established fruitful relationships with the supplier is well to see Internet like a more effective communication channel, that it affects in decisive way the efficiency of the management of the supply relationships.
An error store clerk often from the entrepreneur whom it has as soon as invested in the Information and Communication Technology it is therefore that one to chase the mere advantage of cost (pushed from the competition) at the same time abandoning the constructive relationships delineated in the time with the own suppliers of confidence.
In a context in which it addresses to us to a low number of suppliers accustoms them typical of a dispersed market of supply, all the solutions of the e-procurement will not be suitable to contain the supplying costs.
- Level of concentration of the supply market.
Having little suppliers to disposition, in fact, it is well to maintain of the relationships of mutual confidence, since a resource to instruments like as an example the auctions on-linens can carry in the long run to the rusting of the relationships to the inside of the chain.
I use of instruments web-based strongly has therefore effect on the structure of the inner relations of the supply chain.
An example of failure of the adoption of some of these instruments is represented from the Welsch case.
Welch' s is one of the greater producers to the world of products constituted from fruit like jelly, jam, preserves, spreads, fruit juice drinks and cocktails and is the first producer of juices of grape of the type Concord and Niagara.
Its direct competitors are of the colossus like Tiny Maid (Coca-Cola), Tropicana (Pepsi), and Gatorade.
Concentrated of grape the white woman he represents a fundamental material for the production of he concentrates liquids to you, he concentrates to you he deeps freeze to you, drinks and cocktail and represents in average approximately 15% of the production costs, for an incidence on the equal turnover to approximately 5%.
The concentrated one is a standardizzabile product that answers in the case of the Welsch product to tightening qualitative requirements that affect in decisive way the juice.
The purchase of such raw materials happened through contracts anniversaries, with definition of the amounts and the purchase price of reference of the supply, and for approximately 20-25 years the society it addressed to confidence supply, it selects based on their ability and dimensions to you (Rooster, Vie-Del and Canandigua).
The three suppliers produce concentrated for fermentation, that he demands qualitative standards less rigid you regarding those for juices and of fact they have realized a new product for Welch' s,
and the alliance was based not on a formal contract, but on mutual confidence.
From the 1998 Welch determined to use a Reverse
Auction based on Internet for the procurement of products usually it acquires to you through relations consolidated like those
This decision, that it had like objective an equal
reduction to 30% of the purchase price of the concentrated one, was tied to crescent pressure
on the field towards the price cutting of the end products.
- Concentrated of grape juice
Rooster adjudicated the store clerk, with one reduction of
the inferior price however to how much attending.
Direct consequences of this choice, were:
The case extension a situation in which the emphasis it mails from the enterprise is on the market efficiency and the introduction of an instrument of e-procurement has carried to the destruction of stable and consolidated relations.
- Cooling of the relation with Rooster, than was not however in a position to making forehead the increase of volumes.
- Welch' s was forced to contact the supplying escapes losing from the auction, between which in particular Vie-Del and Canandigua.
- The purchase price that altogether Welch' s was forced to pay was greater of what it had paid before holding the auction.
A relation of vertical type therefore has tramutata in one market relation.
The raw materials in object, even if was contraddistinta from a specificity and a complexity not elevated, had however one strongly importance for the activity of Welsch.
The auction involves that the suppliers must analyze in greater depth the own structures of cost (marginal costs and wished margin).
In this situation the suppliers must manage one greater complexity that in the traditional relation with effects denied to you on the flexibility and the reliability of the supplier.
Therefore, in this case as soon as described, we have seen as the advantages of short period (reduction of the purchase price) can carry to forts it risks in along period.
- Notes 18: Case drawn from Some examples of I use of Internet-based instruments for the management of supplyings, of M. Kalchschmidt, Milan Polytechnic