The findings of the study showed that the procurement process at UTi Domestic was inefficient and ineffective. The researcher recommended the implementation of an e-procurement solution as a solution to the procurement problem, based on the value potential of the solution and the ability of the solution to positively meet all the objectives of the study.
INTRODUCTION
THE STUDY SETTING
Organizations evolve and grow depending on the demands of the markets in which they operate. Conducting business research is useful in determining whether the company's strategy is headed in the right direction.
RATIONALE FOR THE STUDy
The procurement processes at UTi Domestic are manual with minimal control mechanisms and no detailed reporting for effective management. There is a clear need for the implementation of procurement processes at UTi Domestic to address the gaps at hand.
SAMPLING DESIGN
The research will try to find out if UTi Domestic could benefit from redefining procurement processes and from the use of internet technologies (e-procurement) to streamline and manage its procurement processes. If the result of the research proves positive (ie the research result is that e-procurement can add quantifiable value to the organization), then the organization would have a possible solution to the procurement problem.
DATA COLLECTION INSTRUMENT
AIM OF THE STUDY
OBJECTIVES OF THE STUDy
LIMITATIONS OF THE STUDY
The research focused on the courier/logistics industry as a clear gap was identified. Thus, the research will exclude all other industries and the findings will be generalized to the courier/logistics industry.
STRUCTURE OF THE DISSERTATION
Funding was another limitation and the research had to consider the financial impact as opposed to the quantified saving. Chapter three detailed the research methodology, beginning with an introduction to the need for business research and the essence of good research.
CONCLUSION
Chapter five provided a detailed discussion of the results with the aim of highlighting possible trends within the research organization. This chapter has linked the findings of the research to the aims and objectives of the research with an attempt to give meaningful recommendations to the organization.
INTRODUCTION
OBJECTIVES OF BUSINESS
- Profit
- Customer Services
- Social Responsibility
- Employment
- Summary
In the customer-centric business, customer happiness is the focus and customer satisfaction is pursued with greater interest and passion. In addition, internal inefficiencies and duplication of functions consume profit, leading to the organization's non-competitiveness in the new global market.
KEY SUCCESS FACTORS
Key Factors for Success in an Industry
The Value Chain
Each of the above categories adds value to the organization in its own way. These supporting activities add value to the organization just like the primary activities, but in a way that is more difficult to link to one specific part of the organization (Lynch 2000).
PROCUREMENT
- What is Procurement?
- Procurement Process
- Responsibility for Procurement
- Importance of the Procurement Function
Increasingly, organizations are deferring the purchase of non-strategic items to end users and optimizing the expertise of the procurement function for the most critical items (Optimum Purchasing 2003). As mentioned, organizations are deferring the purchase of non-strategic items to end users and optimizing the expertise of the procurement function for the most critical items (Optimum Purchasing 2003).
PROBLEMS ASSOCIATED WITH PROCUREMENT
VALUE ADDING THROUGH BUSINESS PROCESS RE-ENGINEERING
The Essence of Business Process Re-engineering (BPR)
The consequence of this is the elimination of the demarcation between departments, which could be followed by a reduction in the number of employees. Ensuring that those who use the outputs of the process are those who implement the process.
The Impact of BPR on Business
Implementation of BPR
Service organizations can begin their commitment to customer satisfaction by placing the customer at the center of the re-engineering process. During the implementation phase, organizations must recognize that IT is only part of the restructuring solution.
PROCUREMENT AT UTi DOMESTIC
An Insight Into UTi Domestic
However, although studies indicate that more than half of all reengineering efforts are initiated as a result of perceived technological opportunities, the actual technological solution is far less important than educating employees to use IT as both a strategic initiative and as a tool for the re-engineering process (Weicher et. aI2002). Customers are able to connect directly to the UTi Domestic applications via a real-time application programmer interface and fully integrate and connect their operations and their own supply chain in real-time (Hartley 2004).
UTi Strategy
Twenty (20) quarters to deliver results - setting the goals of what needs to be achieved is easy. Setting a strategy and specific interim goals of what needs to be done each quarter to ensure success is difficult.
Procurement at UTi Domestic
The researcher believes that the purchasing function at UTi Domestic is in urgent need of renewal, especially in line with the aim to comply with the group strategy. The following analysis attempts to consider E-Procurement as a means of BPR to streamline purchasing processes at UTi Domestic.
BUSINESS PROCESS REENGINEERING USING E-PROCUREMENT
- BPR and E-Commerce
- What is E-Procurement?
- The Influence of the Internet on E-commerce
- The Impact ofE-Procurement on Business
- The Early Trials ofE-Procurement
- Current Statistics on the effect ofE-Procurement
- The E-Procurement Decision
- How does E-Procurement work?
- Key Considerations Regarding E-Procurement
- Managing the 'softer' issues
- Conclusion
The more appropriate inquiry is how to engage the use of the Internet to remain competitive (Porter 2001). A consideration of the procurement strategies for the different spending categories is needed (1 st steps: Preparing for E-Procurement 2003).
INTRODUCTION
THE NEED FOR BUSINESS RESEARCH
The growth of the organization has created a vacuum in certain areas that requires an urgent makeover. At this specific turning point in the organization, research was needed and informed decision making was imperative to ensure sustainable growth of the organization (Saffy 2005).
THE ESSENCE OF GOOD RESEARCH
Clearly defined purpose: This requires the research team to carefully distinguish between symptoms of problems, problem perception and the actual research problem. Thoroughly planned research design: This requires a thorough overview of the exploratory procedures and the accompanying constructs.
OBJECTIVES OF THE STUDy
Determine whether the management at UTi Domestic believes that there is a need to implement an e-procurement solution. Determine if management at UTi Domestic is willing to make the financial investment to make the e-procurement implementation a success.
THE STUDY ENVIRONMENT
THE STUDY DESIGN
SAMPLING DESIGN
Provide an outline of the groupings of the procurement staff, the population and sample sizes as well as the response rates. Provide an outline of the groupings of the procurement management staff, the population and sample sizes as well as the response rates.
THE RESEARCH METHOD
The Questionnaire
Welman and Kruger (1999:66) consider a response rate of thirty-three percent to be representative of the population. The following table outlines the advantages and disadvantages of the questionnaire as a data collection method.
Requirements of a Good Questionnaire
Specific instructions should appear on the questionnaire and be placed in the most useful place possible. Several situational factors are key determinants in the choice to use open versus closed questions in the questionnaire (Cooper and Schindler 2003:373).
THE DESIGN AND LAYOUT OF THE QUESTIONNAIRES
Type of Questionnaire Used
The questions were designed to be non-invasive and all questions in the demographic section allowed a choice from a scale that did not require the respondent to provide precise demographic details.
BIOGRAPHICAL VARIABLES
PRETEST OF THE QUESTIONNAIRES
CODING OF DATA
THE STATISTICAL METHODOLOGY
CONCLUSION
INTRODUCTION
THE STUDY RESPONSE RATE
BIOGRAPHICAL VARIABLES
In terms of years of experience in the purchasing function, eighty-nine percent of purchasing staff had between one and five years of purchasing experience, compared to fifty percent reported by management. Eleven percent of purchasing employees had purchasing experience of between six and ten years, with no purchasing employee having more than ten years of purchasing experience.
PROCUREMENT MANAGEMENT QUESTIONNAIRE RESULTS
Management Questionnaire Structure
The possible financial investments available to solve the procurement problems and the period over which these investments are available. Management would have access to information to effectively manage the purchasing function at UTi Domestic.
PROCUREMENT STAFF QUESTIONNAIRES
- Issues with procurement at UTi Domestic
- Importance and Value of the procurement function at UTi Domestic
- The Importance of Information to the Procurement Function
- Management Investment to remedy procurement problems
- E-Procurement Possibilities
Respondents were divided on whether management had access to information to manage the procurement function at UTi Domestic. Forty-six percent of respondents believed that UTi Domestic was ready to implement an e-procurement solution (thirty-two percent of respondents remained neutral on this topic).
FREE FORMAT RESPONSES - PROC. STAFF QUESTIONNAIRE
CONCLUSION
INTRODUCTION
AIMS OF THE STUDY
BIOGRAPHICAL VARIABLES
VALUE POTENTIAL OF CURRENT PROCUREMENT PROCESSES
The above findings clearly show that the procurement processes at UTi Domestic are far from being effective and efficient. Since both management and procurement staff agree that the procurement process at UTi Domestic needs redesign to suit current business requirements, Business.
ACCESS TO INFORMATION
To manage the expectations of an e-procurement effort, it is important to keep in mind that some of the return on investment will be realized through lower purchase prices. The literature reveals that information is essential to the effective management of the procurement function, assisting in the procurement decision-making process (Hartley 200).
STAFF READINESS FOR E-PROCUREMENT IMPLEMENTATION
Information is essential for procurement and if there is good data, the organization can use economic analysis methods such as cost-benefit analysis or cost-utility analysis for procurement decision-making (Prokurimi 2005). This department would also be tasked with creating a centralized information repository to be used to manage the procurement function across all divisions and branches of UTi Domestic.
MANAGEMENT'S VIEW ON AN E-PROCUREMENT SOLUTION
Technology is fundamental to BPR and is essential to the success of its implementation (Fitzgerald & Ciaran 1996). As revealed in the literature above; Champy, Hammer and Davenport view information technology as a crucial component for process redesign.
MANAGEMENT'S WILLINGNESS TO INVEST IN AN E-PROCUREMENT
Information technology can prove useful during the reconstruction analysis and design process. During the implementation phase, the organization must recognize that information technology is only one part of the re-engineering solution, and the organization must continuously monitor IT performance and keep abreast of IT developments (Weicher et. al 2002).
THE IMPACT OF ELECTRONIC PROCUREMENT ON PROFITABILITY 108
This is supported by the literature, which advocates that an e-procurement solution will assist in managing the procurement function. This clearly shows that an e-procurement solution will have a positive impact on the management of the procurement process.
THE IMPACT OF BPR AND E-PROCUREMENT ON EMPLOYMENT
According to Hartley (2004), implementing an e-procurement solution enables faster and more informed decision-making by employees due to a centralized repository of information, allowing staff to focus on other value-added tasks. Efficiency benefits derived from an e-procurement solution include reduced procurement costs, faster cycle times, fewer unauthorized purchases, more highly organized information, and closer integration of the procurement function with key back-end systems (Rayport and Laworski 2001).
CONCLUSION
The third objective of the study sought to determine the readiness of procurement staff at UTi Domestic to implement an e-procurement solution. The findings of the study show that the majority of procurement staff believed that an e-procurement solution would increase profitability.
INTRODUCTION ............................................................................. '"
THE EFFECT OF MANAGEMENT EXPERIENCE
PROCUREMENT PROCESS REDEFINED
THE NEED FOR INFORMATION
RECOMMENDATIONS
- Process redesign with or without technology
- Staff readiness for the e-procurement solution
- Management's willingness to invest in an e-procurement solution
- Impact ofBPR and e-procurement on employment
- BPR using e-procurement is worth the effort
The results of the survey indicated that the purchasing staff at UTi Domestic needed training to be able to implement an e-procurement solution. Management must also allow purchasing personnel's opinions to be heard.
CONCLUSION
An investment in an e-procurement system will add to the financial bottom line at UTi Domestic. The implementation of an electronic procurement system will assist UTi Domestic in effectively managing the procurement process.
