The advent of e-commerce has changed the corporate climate in many ways. Traditionally, it has been the product development and marketing departments that have been seen as more on the forefront of change. Purchasing departments are now stepping into the spotlight as an engine of change in today's technology-based marketplace.

Internet-based procurement is transforming purchasing departments into hotbeds of strategy. And the strategy they are discussing is how to save money. By bringing an end to maverick spending, a company can save 3% to 6% on its MRO costs. Internet-based auctions on capital equipment can save another 1%. Using comparative online shopping to buy parts and raw materials, can save yet another 3% to 6%. With savings like these, it is easy to see why purchasing departments are becoming even more essential to a company's success.

Consider the ways in which inventory costs are changing. By having an online supply line, companies are getting a more accurate view of how much they are selling and when, which means that high inventory levels are becoming a thing of the past. Purchasing departments can plan ahead based on online selling records and cut inventory levels by 25% or 50%, and sometimes even 75%.

All of these little "e-miracles" add up to make purchasing managers the new agents of positive change in a company's fortune. Aetna, for example, expects to save $100 million in 2001 by moving their purchasing to the Internet. By saving their companies millions through online procurement, purchasing departments have become the new leaders in the electronic business arena.

Source: Procurement Personnel Gets Hip
Rob Spiegel
E Commerce Business, Aug. 14, 2000
http://www.ecommercebusinessdaily.com