e-Procurement at Cathay Pacific Airways: e-Business Valuation Group 7/ B2B Kunal Kumar PGP/16/204 AnkitVermaPGP/16/185 Chandan Bharambe PGP/16/078 StutiAnand PGP/16/231 Supriya S M PGP/16/234
1 What are the benefits of the e-procurement systems for the Airlines Purchasing Department? Quantifiable benefits: Reduction in the purchase price Increased spend through CxeBuy Reduction in inventory cost Reduction in transaction cost Reduction in order cycle time Improvement in order accuracy Time saved in procurement activity Time available for carrying out value-adding activities Sourcing cost reduction.
Non-Quantifiable Benefits: Real-time availability of standard and ad hoc purchasing intelligence reports.
The CXeBuy would reduce transaction cost per order Reduction in order cycle time: The order cycle consists of: requisition – order – receipt – payment. The order cycle time can be reduced through a number of means, including the electronic transmission of purchase orders. Improvement in order accuracy: This measures the reduction in the number of purchase order amendments as a result of using CXeBuy Time saved in procurement activity: CXeBuy has eliminated the step of sending orders to suppliers via APD. This represents time saved in procurement through the staff that could be well spent in customer services Time available for carrying out value-adding activities: These could include activities that result in better supplier relationships, better prices, improved Cathay Dupont Award service levels of suppliers etc. Sourcing cost reduction: Staff was actively engaged in preparing requests for proposals and requests for information. Now, with CXeBuy, such requests are simply posted on the Web or otherwise delivered electronically, thus reducing costs and time in communication 4. How can Cathay used the Balanced Scorecard technique to measure the short term and long term benefits delivered by CXeBuy? The balanced scorecard technique tracks performance in 4 key area Financial criteria that determine the project’s value to shareholders Customer/user satisfaction Internal business processes Learning and growth potential.