New generation E-commerce tools for procuring 'indirect' spend commodities

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E-commerce.jpgDirect spend commodities are products that are directly involved in the organisation's core business and is often also referred to as 'productive spend'.  For instance, in a manufacturing organisation, all equipment, materials and packaging will be included into this category.
 
Indirect spend, conversely, refers to and encompasses non-productive goods and services. This category represents a wide and varied group of product / services categories, such as:  advertising and marketing, facilities management, insurance, IT, office automation, recruitment, training and education, travel and so on.  In this specific group MRO (Maintenance, Repair and Operations) forms an important subgroup as it straddles a wide variety of products ranging from bearings, belting, consumables, electrical, electronic, safety and transmission, etc.

When examining MRO closely it is found that this segment can represent as much as 80% of the line items required and as little as 20% of the procurement spend.  Obviously this is an area in which the cost of invoice and payment is totally disproportionate to the value of the item / service.  Accordingly, it is in this subgroup that procurement departments can find substantial value in new generation E-commerce services being provided by suppliers worldwide.  In point of fact this is one area of general business that is ideally suited to E-procurement and E-sourcing.

In the specialised field of electrical and electronic products companies are confronted with product ranges that run into the thousands of items available.  This is where procurement personnel have to grapple with the lack of standardisation of the overcrowded marketplace of manufacturers and suppliers.  Thus, to find the widget which fits your specific machine best can often be an extremely frustrating and costly exercise.

The good news is that E-commerce technology has now evolved and embraced the wonderful search advantages brought about by contemporary Internet technology.  For instance, a single supplier can make 350 000 products available online with the capacity to deliver and fulfill worldwide on an extremely cost effective basis.  This solution is based on a powerful online search facility that makes it easier than ever for customers to find the product they are looking for:  By simply using the principle of guided navigation, customers can self-select the product areas that they are interested in by using product images.  Furthermore, new search pages enable customers to filter their results even more extensively by using set product features. Additional product attributes can thus be displayed on a page, making product comparisons easy to achieve.  Ultimately customers can also check live product availability and pricing.

To find your electronic widget or to improve your indirect spend search capabilities, visit www.rs-components.com

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