28 April 2005 | Liam O'Brien
Tesco has replaced its manual paper-based purchasing operation with an electronic ordering and payment system throughout its 780 stores in the UK.
Sixteen thousand staff use the system from procurement software company Marrakech to buy indirect goods and services from about 200 suppliers.
Tesco is paying a monthly subscription to use the web-based software, which will enable users to order from a single electronic catalogue and raise internal invoices.
Savings are to be made by eliminating maverick purchasing, lowering process costs and extracting better buying terms from suppliers, according to Marrakech.
David Hsieh, president of Marrakech, told SM: "A ballpark figure for savings is in the region of 10 per cent, but we have clients who have saved 20 per cent.
"For Tesco, which spends hundreds of millions of pounds on indirect purchases, the savings are going to be considerable."
Tesco declined to estimate the level of savings it will make.