UK firms slow to make use of e-procurement

24 February 2000
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24 February 2000 | David Arminas

European manufacturers, especially those in the UK, are starting to use e-procurement, but are dithering about implementing systems, according to a recent survey.

While 38 per cent of UK manufacturers use some sort of e-procurement system (the highest percentage of all of the companies questioned), only 19 per cent plan to implement one (the second lowest percentage of all of the countries).

In comparison, 42 per cent of German manufacturers use e-procurement systems, and 13 per cent plan to implement them (the lowest percentage of the countries questioned), according to e-commerce specialists

The survey of 300 companies in France, Germany, Italy, the Netherlands, Sweden and the UK, also showed that few manufacturers - only 10 per cent in the UK - are using or planning to use e-procurement systems for maintenance, repairs and operations (MRO).

Compared with the manufacturing sector, Europe's non-capital intensive companies, such as banks, appear to be embracing e-procurement for MRO. German firms lead the pack, with around 50 per cent either using it or planning to use it, compared with 16 per cent of UK companies.

Small to medium-sized enterprises (SMEs) have a particular problem with e-procurement, according to Steve Haslett, managing director of SME forum the Independent Manufacturers' Alliance.

"It's because they may not have a buying director, or that person may not be a professional purchaser," he said. A director of an SME is often too busy to consider procurement solutions of which the implications are not yet fully understood, he added.

"Accepting e-procurement is a cultural challenge," said Ken Lewis, director of Dutton Engineering, a stainless-steel enclosure fabricator for the electronics industry.

Although Dutton's system brought its manufacturing lead times down from six weeks to around eight hours for most orders, it had to install the IT for its suppliers and teach them how to use it, Lewis said.

Understanding the benefits of e-procurement is the key to implementing it, even for large manufacturers, said Bill Johnson, supply manager at Siemens Power Generation. The firm is working with a supplier to create an electronic catalogue for MRO items.

One of the main problems is proving to prospective users that the benefits will come, Johnson said. "The survey results don't surprise me. There's a lot written about e-procurement, but companies are still cautious," he added.

The survey also claimed that 25 per cent of manufacturing and 42 per cent of financial services firms in Europe are wasting more than 20 per cent of management time on routine, day-to-day procurement.

Copies of the survey, E-procurement in Europe, are available from on 01483 778610


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