E-supply chain management in the government sector involves using web-based tools to manage the procurement lifecycle electronically. This includes e-sourcing to establish contracts online and e-purchasing to requisition, authorize, order, receive, and pay for items electronically. E-procurement provides benefits like reduced costs, transparency, and a smaller environmental footprint. However, some suppliers and groups may refuse to participate electronically, requiring dual paper and electronic systems. E-procurement also may not be suitable for all procurement like complex projects with undefined requirements.

1. E-Business
e-Supply Chain Management
in the Government Sector
Sue Hyden
Streamnet Ltd

2. What is e-Supply Chain Management ?
• e-Supply Chain (e-Procurement) covers
– the use of web-based tools by buyers and suppliers throughout the
complete procurement lifecycle. It comprises of two main aspects
• e-Sourcing (including e-Auctions)
Which is a strategic activity which supports the establishment, management
and monitoring of a compliant contract with the sourcing activities
• e-Purchasing
Which is where the internet is used to operate the transactional purchasing
activities of requisitioning, authorising, ordering, receipting and payment
processes..”
((http://www.ogcbuyingsolutions.gov.uk/publications/downloads/managed/e_procurement_leaflet.pdf)

4. Why is e-Procurement so important ?
• HM Treasury Spending Review and The National
Procurement Strategy published October 2003 detailed
• Treasury Spending Reviews (2002) – all public sector bodies are expected to identify and deliver
cost savings and efficiency benefits = > 2% per annum (average) (2004 – 2012) with aim of
releasing more resources to the front line
( see “Blue Frog http://www.ogc.gov.uk/documents/cp0025.pdf
• Detailed Targets for e-business and e-invoice in both local and central government
• Failure to meet requirement will effect “best-value indicators” against which Councils and Central
government departments are being judged and will have budgetary implications
(http://www.hm-treasury.gov.uk/media/53F/FE/sr2004_ch1.pdf)
(www.hm-treasury.gov.uk/spending_review/spend_sr04/report/spend_sr04_repindex.cfm)

5. (http://csr07.treasury.gov.uk/simulation/)

6. Key Areas:
• e - Catalogues
• Government Business Cards
• e - Sourcing
• e - Auctions

7. E- Catalogues
• Zanzibar, Catalyst
• “is an electronic Government marketplace
for the purchase of goods and services
through electronic catalogues from a vast
range of suppliers to government”

8. Government Business Cards
• Annual Spend of £ 1.1 billion
• Estimated > 62,000 cards
• Annual Saving of 2004/05 FY £187 million
• National Audit Office estimated saving of
£ 28 per transaction v paper administrative
system

9. • E-Sourcing
“e-Sourcing is the use of secure web-based collaborative
tools by procurement professionals and suppliers to
conduct the strategic activities of the procurement
lifecycle online. These strategic activities, including
requirements definition, tendering, negotiation, award
and contract management, are designed to deliver value
for money procurement solutions to the public sector.”
Ref: OGC Buying Solutions
(http://www.ogcbuyingsolutions.gov.uk/esourcing/about/esourcing_about.asp)

10. • E- Auctions
“offer a simple, transparent means of
ensuring value for money where suppliers
dynamically compete directly against each
other using internet technology to submit
their most competitive proposals”
Includes “Reverse Auctions”
OGC Buying solutions
(http://www.ogcbuyingsolutions.gov.uk/publications/downloads/man
aged/e_procurement_leaflet.pdf)

11. e-Auctions
“The Movie”

13. e-Procurement Benefits:
• Drive down costs
• Reduced Procurement Cost / Cycle time
• Reduced Administration
• Transparency
• Audit ability
• Green footprint

14. Issue:
• Suppliers must be e-Enabled
• Some groups refuse to participate on
religious / social grounds (therefore required to
run dual systems paper & electronic )
• Not suitable for all types of Procurement
(eg Project based or where requirements
not standard or tightly defined)

15. • Web Reference sites:
• Office of Government Commerce (http://www.ogc.gov.uk)
• OGC Buying Solutions (www.ogcbuyingsolutions.gov.uk)
• National E-Procurement Project (NePP)
(http://www.localtgov.org.uk/default.asp?sID=1100774743609)
• I&Dea (Improvement and Development Agency)
(http://www.idea-knowledge.gov.uk/idk/core/page.do?pageld=1002)
• Buy-IT Best Practice Network
(http://www.buyitnet.org/Best_Practice_Guidelines/e-Procurement/index.jsp)