Pharmaceutical Technologist - March 2008 - (Page 12)

E-procurement means lean procurement E-commerce was to revolutionize the way companies made procurement decisions. For some it happened, but for others the systems have not lived up to the promises. Using lean methodologies will allow companies to optimize procurement processes as they move to implement the next generation of e-commerce systems. Walter Lentfert T owards the end of the 1990s, many companies envisioned e-commerce initiatives replacing traditional ordering channels within 5 years. Now, almost 10 years later, we know this has not happened. Many solutions have been abandoned because e-commerce processes, as well as the procedures they supported, were not optimized. Early adopters of e-commerce — mainly large pharmaceutical and biotechnology businesses, and their procurement organizations — spent a significant amount in implementing e-procurement solutions that were based on existing processes. Other organizations created purchasing card systems, where expenditure was managed by maximum amounts per product category during specified periods. Such management could not direct expenditure to preferred suppliers, and often product categories were not specific enough to properly manage expenditure. Now, these companies are reviewing their investment and deciding on future direction. Adopting a technology early can generate a competitive advantage and significantly lower the procurement spend in a company, but if the platform is not mature enough then large investments will be required for successful implementation. E-procurement in the pharmaceutical industry has mostly been used to manage indirect costs, while direct, production-related expenditure is still managed by processes that were in place before e-procurement. Companies are now deciding whether to invest further in current e-procurement 12 MARCH 2008 PHARMACEUTICAL TECHNOLOGIST

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Pharmaceutical Technologist - March 2008 Contents News Morpheus Market Watch E-procurement Means Lean Procurement The Rational Enquirer Simulating for Success Q&A

Pharmaceutical Technologist - March 2008

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