Chapter 2, Problem 1GPE

Summary Introduction

To explain: The steps in the purchasing process that are done electronically versus on paper.

Summary:

Company CC is the last remaining private bottler of Company CK. Company CC has come up with many innovations from the day onwards. Company CC is one of the 64 bottlers worldwide with 6,000 employees selling a case of coke for every four seconds.

The purchasing process:

The purchasing process encompasses all the activities as shown below:

• Identification of user requirements.
• Evaluation of the user needs effectively and efficiently.
• Identification suppliers who are capable to meet the demand.
• Development of agreement with those suppliers.
• Development of the ordering mechanism.
• Ensure that the payment process occurs promptly.
• Ascertaining that the needs are effectively met and
• Driving continuous improvement.

Explanation of Solution

Steps in the purchasing process that are done electronically versus on paper:

Purchase request:

This step needs to identify and understand the needs of the customer. It involves filling out a paper form and going through the required approvals for the authorization process.

An ERP system works on the automatic creation of the documents online and the approval also does not require a long process.

Supplier selection:

The process involves the supplier to purchase the item that is requested. This will also result in a quote process if it is required to be initiated.

Purchase order:

In the manual process, it involves the dispatch to the supplier in the paper copy in situations of a manual process. There is an electronic notification if it is an electronic process.

Fulfillment:

The dispatch of goods to the organization by the supplier is carried out. The lead time will be decided based on the type of processing which is either electronic or paperwork.

Receipt of goods:

This includes letting go of the goods through a receipting process which matches the orders and checks for the correct quality.

Invoice and payment:

The paperwork provides a paper receipt while the electronic process will give an e-receipt.