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Ford spends an estimated $15.5
billion each year on non-production goods and services, making
it one of the largest purchasers of such goods world-wide.
With Ford's continuing quest to cut costs, Ford utilises an e-procurement
solution, with the intention of cost cutting from the everyday
tasks such as purchasing office supplies, and filing expense
reports.
Ford has revised the purchasing
process, instead of receiving catalogues, and having employees
complete purchase orders that must be approved by management,
which often takes days or weeks. Employees now log onto an Internet
system, browse manufacturers catalogues, order from a pre-approved
group of suppliers, and obtain purchasing approval in minutes.
Ford anticipates to cut spending and transaction costs by as
much as thirty percent.
Ford also uses procurement
applications for processing the more than one million travel
and expense accounts that employees submit each year. It is estimated
that large corporations spend about $36 on processing each expense
report. As this example illustrates, the focus of procurement
automation is not so much on production-related raw materials
but on non-production goods.
This case examples was supplied
by EDS. To learn more abour E-procurement read the paper Electronic Procurement
supplied by Steven R Leonard, President EDS E.solutions EMEA,
UK. This paper is part of our eBusiness
and eWork pages. |