Betapharm is a pharmaceutical company that offers its products worldwide. The firm in recent times has moved to e-Procurement away from the manual ways of procurement. In the year 2003, the firm suffered some competition from generic drugs; hence, the need to come up with systems to cut down on production costs. According to the National Association of Purchasing management of U.S, e-procurement could reduce the cost of the purchase order by three-quarter of the actual costs, and this motivated many companies to choose the system.
Betapharm deals with pharmaceutical products such as drugs for central nervous system, gastrointestinal, anti-infective, and respiratory. The products are very delicate and need much care since if mishandled or produced in the wrong way they may cause major harm to users. In addition, some of the drugs are fragile due to their packaging and can easily break.
Initially, the procurement was done manually such that for every product purchased, there was a different sourcing group made of representatives from procurement, logistics, quality, finance, and technical departments. The group could determine the best procurement model for the product, implement it, and select a supplier. The current system used is e-procurement, which enables the management to develop contracts, manage sourcing plans, analyze impacts of sources, and manage the procurement process online (Anuar). The system is called Emptoris ePass and has the capability to evaluate all the bids and select a supplier based on characteristics and price.
Centralizing the procurement department is a good idea for Betapharm, because it helps eliminate the costs that could be incurred when involving different groups for various products. Using the new system, products specifications are made transparent to all suppliers, which result in improved quality since they all respond to uniform information (Anuar). The disadvantage of e-procurement is that in the case of a system failure, the procurement can be compromised or the technical people may alter some details in the system to suit a supplier.
E-procurement is an effective system to use for any organization no matter the product because it helps keep the firm updated as culture and trends change. In addition, the department can have real-time monitoring of activities taking place, hence, efficiency.
Work Cited
Anuar, Fara Farhana. "To Determine the Procurement Performance on E-Procurement Technology Usage and Procurement Practices on an Organization". SSRN Electronic Journal n. pag. Web.
