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An online supplier exchange
Online procurement life cycle management, which includes all pre-order and post-order purchase transactions from requisitions to invoices, significantly reduces the delivery lead-time and improves supplier relationship. It offers the following key benefits to the Retail and Manufacturing industry:
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Improved supplier relationships through collaboration: This significantly reduces stock-outs and required stock levels while improving turns and working capital management for the retailers.
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Inventory optimization: Accurate day-wise forecasting capabilities for each SKU and store combination helps in improving stock replenishment between the distribution centre and the stores.
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Significant cost reductions through reverse auctions: Buyers publish bid specification to allow prospective suppliers to bid on-line against each other by offering their best prices.
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Streamlined indirect procurement process: This allows the organization manage the suppliers and their contracts centrally thereby curbing unnecessary purchases.
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Ability to consolidate demand across the retail chain: Replenishment requests for merchandise from different locations can be collected and consolidated centrally for better stock utilization and higher fill rates at the point of sale.
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Effective spend management analysis: The advanced web interface provides the retailer increased visibility and control of the spending data across different locations and users.
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Performance scorecards: The application provides KPI based scorecards, which help the buyers to track the performance of the merchandise category as well as its suppliers.
Figure 2: Demand-driven replenishment models
Sourcing optimization through private exchange
This exchange facilitates the demand to be collected from all points of consumption, which can be aggregated for necessary procurement activities. Procurement transactions can then be initiated with the participating members from the supply side. This leads to a highly efficient supply chain network resulting in huge savings for the retailer and also translating into a high level of service for its customers.
Sujoy Choudhury is Head, Retail Vertical, NIIT Technologies
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