The Benefit of E-Catalog for Indirect Materials Procurement

E-catalog for indirect materials procurement is an essential link in digitizing an upstream supply chain, especially for multi-plant manufacturing enterprises. Unlike traditional procurement systems, e-catalogs enable a direct B2B collaboration between suppliers and enterprise buyers. They accelerate decision-making and responsiveness while expanding the accessibility of the enterprise to a diverse supplier base. Increasingly, e-catalogs are proving to be amongst the most robust, configurable, and automated procurement solutions – anywhere in the world.

What Does an E-Catalog Do?

Simply put, an e-catalog transforms indirect materials’ master data into a dynamic, structured, commoditized, and attribute-rich index that’s exhaustive and easy to navigate. It brings the experience of a private e-commerce system to a large manufacturer.

Far from being just a blunt tool to browse prices and features of indirect materials, the e-catalog system of today is an intelligent and automated P2P software solution that improves upon each step of the purchase-to-pay procurement process. It also enhances data visibility and generates real-time tracking reports. A good e-catalog is deeply synchronized with the enterprise’s e-procurement system, enhancing its operations’ productivity and efficiency.

For instance, when a manufacturer requests an MRO SKU, the e-catalog can automatically check for inventory, availability, pricing, red flags against the suppliers, and several other such filters customized into the software. If an item meets all the requisites, buyers can purchase the product in a few simple clicks. At the same time, the e-catalog will also collect and assess relevant P2P automation data and generate metadata for the e-procurement system or ERP.

What are the Benefits of an E-Catalog?

An e-catalog is a missing key for a large enterprise that uses multiple and disconnected supply chain data repositories but lacks an integrated procurement solution. It is especially true for an enterprise’s day-to-day indirect materials needs that are difficult to categorize and tabulate manually.

The advantages of an e-catalog approach are endless. They are quick, scalable, reliable, and mobile. They boast a solid security system, are user-friendly, and are upgraded remotely with little to no lag. They give consistent and accurate results that improve with time, thanks to their machine-learning and AI abilities. Here are a few of the primary benefits of using an e-catalog for indirect materials procurement:

  • Enhanced Decision-Making: It features robust purchase-to-pay capabilities that assess suppliers on multiple parameters like side-to-side comparisons on total procurement costs, recommendations for similar SKUs available with further discounts/better volumes, product rankings and reviews, ETAs, compliance reports, re-ordering workflows, and a multitude of risk-assessments.
  • Quick Configurability: It can enhance the end-to-end procurement experience with specific and localized customizations in the system like automated conversion of currencies from US Dollar to AED and language translation from English to Arabic. These features facilitate easy cross-cultural, trans-national transactions like the exchange of accounting records, invoices, purchase orders, and delivery memos.
  • Improved Performance: Native AI-enabled data tools analyze user purchasing behavior and enhance search results to improve the procurement experience. Contents of the catalog are updated in real-time to incorporate data from different structures at different levels. Easy-to-understand interface, akin to e-commerce websites, and features like full-text searches/fuzzy searches increase the response time. Dynamic price listings keep the end-user updated daily and reduce delays in operational activities.
  • Reduced Costs: As a streamlined procurement automation solution, an e-catalog neutralizes the use of stationery and the possibility of input errors. Moreover, it reduces the time spent manually browsing databases, conceptualizing business guidelines, exchanging data, and processing analytics. One research suggests up to 40% operational cost reduction post-implementation of the e-catalog approach.
  • Easy Compliance and Control: Buyers can define highly specific approval SOPs for non-compliant materials. The supplier-purchaser inquiry feature enables direct communication for clarifications and further actions on orders, invoices, or payments.

How Can E-Catalogs Enable the Supply Chain Leaders of an Enterprise?

In a landmark case, a Fortune 500 oil and gas giant that operates globally began digitizing its supply chain management. By collaborating with the right digital supply chain solutions enterprise, they could access 1.3 million MRO items with an average of 20 attributes per item. In the very first year of its implementation, the enterprise witnessed a 20% decrease in PO expenses, thanks to the data management of the e-catalog. Additionally, their team optimized their workload by 15% every year for three consecutive years. What’s more, their average time spent on negotiations went down by 35%.

This isn’t an isolated case. CPOs, CFOs, COOs, CIOs, and CTOs from all across the UAE are now taking note of the e-catalog as a transformative tool in their supply chain management that optimizes efficiencies upstream and reduces production costs downstream. B2B marketplaces across the 7 emirates are adopting this approach for all their purchasing situations. It is also in line with the UAE government’s strategy for the fourth industrial revolution to reinforce the national economy as a digital one.

Automated procurement solutions like e-catalogs for indirect materials will soon be the global norm. Advances in AI and ML tech lead the global leadership towards a procurement experience that’s personalized, user-friendly, and enhanced to optimize the productivity of the supply chain operations.

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