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 vendor‑  managed  inventory  (VMI)

, where supply chain 

partners will manage the replenishment of parts or items for sale as described in Case 

Study 6.1.

● 

Production – the integration of systems managing manufacture with the procurement 

systems used to ensure that manufacturing is not limited by poor availability of parts.

● 

Outbound – this is management of fulfilment of products to customers. It is not usually 

managed by the e‑procurement system, but demand must be evaluated by linking through 

these systems to achieve 

efficient consumer response (ECR)

.

Examples of the benefits of e‑procurement

Case study 7.1 is a classic example illustrating many of the reasons why many companies 

are now introducing e‑procurement. The primary driver is cost reduction, in this case from 

an average of £60 per order to £10 per order. In many cases the cost of ordering exceeds the 

value of the product purchased. In another example, BT’s implementation of e‑procurement 

enabled 95% of all its goods – including desktop computing, stationery, clothing, travel and