Online Ordering Systems to Suppliers
Online ordering systems involve direct electronic links from a purchaser’s system to a supplier’s system, often through a modem or other web-enabled technologies. A major feature of online ordering systems is that suppliers often bear the responsibility for developing the software required to link with a customer’s system. Online ordering is a logical approach once an organization has established a blanket purchase agreement or longer-term contract with a supplier. The strategic part of the sourcing process involves identifying, evaluating, and selecting suppliers. Online ordering systems allow purchasing or users to place orders directly into a supplier’s order-entry system. Advantages of online ordering systems include the following:
- Immediate visibility to back-ordered items
- Faster order input time, which contributes to reduced order cycle times
- Reduced ordering errors
- Order tracking capabilities
- Order acknowledgment from the supplier, often with shipping commitment dates
- Ability to batch multiple items from multiple users on a single online order
- Faster order cycle time from input to delivery
Suppliers establish online ordering systems so purchasers can have dedicated access to the supplier’s order-entry system. The system creates a seamless tie-in or linkage between organizations. Third-party software providers such as Ariba provide turnkey solutions that will help to further this development in the future.