15 June 2000 | Elizabeth Bellamy
E-commerce may lead to job losses in purchasing departments and fail to raise the profession's profile, a leading business expert has warned.
Sir John Harvey-Jones said rather than being "a chance for purchasing managers to change things", e-procurement initiatives were more likely to see traditional purchasing jobs "done away with and purchasing delegated to individual managers".
This could lead to a job cuts because many companies viewed purchasing as an administrative function and not a key role, added the broadcaster, writer and former chairman at chemical company ICI. "If you look at it that way, then that means staff cuts," he told an e-procurement conference in London last month.
But Sean Gadman, head of e-procurement at consultancy Cap Gemini, disagreed with Harvey-Jones. The benefits offered by e-procurement were forcing businesses to take note of their purchasing functions, he told SM. Trading over the Internet had allowed businesses to buy a wider range of materials and also shortened delivery times.
Harvey-Jones, a former supply manager at ICI, said that supply chain management, cutting supplier numbers, aggregate buying and other practices had provided benefits in areas such as raw-materials purchasing in recent years, but were not being used effectively to buy maintenance, repairs and operations (MRO) goods and services.
"MRO is the most neglected area of all and the application of these new ideas to this has proved extremely limited," said Harvey-Jones. But while e-procurement offered a chance to do this, UK business was slow to jump on the bandwagon, he added.
"I have been talking for ages about the necessity for change and how slow British business has been in taking up the electronic opportunities. The changes that have already occurred are turning the world into one marketplace. If we don't hurry up now, we are going to be in trouble," Harvey-Jones warned delegates.
E-procurement could reverse the centralising trend that was emerging in many organisations, he said. "You can't compete with the fastest if you are centralised. E-procurement has allowed purchasing decisions to be delegated."
But he added that organisations still undervalued procurement. "I am amazed at how few are interested in it," he said, even though purchasing was involved in buying goods and services that amounted to nearly half of raw materials costs at most firms.