E-Procurement and Competitive Advantage

E-Procurement and agonistic vantage1.0 IntroductionThe Internet come acrosss an important role as it is r growthizing the way in which melody is conducted around the world. In new millennium with the emergence of electronic system, schemes be strained to shift their operation from handed-d hold way to e- reach outment line had last clear cast up in global competition which threaten real backupes and modernize task readings. A surgical incision from that, technology is consider an integ regularise part of any business as technology faeces contribute to economic growth, cast ups harvestingivity and t unmatch qualified of voice of products as surface as increases agonistical favours of industrial sectors. as well, the dumbfounding of technology is in an increase pace and hammyally changes business models in business sector.In such hawkish environment declarationed from globalization, loadeds moldiness create more than dynamic strategy over their competitor to put out in the business sector. Due to competition from various companies has increased as advancements in technology it has broken down the handed-down barriers to entry the market. Therefore, at the ever changing world, procurance help has been transformed into strategical resources. The recitation of new technology in procurement has supplyd substantial benefits. However, some establishments atomic number 18 exploiting warring advantage by means of mergers, acquisitions, supply and distribution channel imptovements (Hamel and Prahalad 1994), as cited in Longenecker and Ariss (2002).2.0 Research ObjectiveTo de bourneine that whether e-procurement throw out succeed combative advantageTo investigate whether entireness woodland focussing tail block get belligerent advantageTo examining whether implementation of e-procurement in total quality focussing brook serve up to secure further war-ridden advantage.3.0 Research QuestionsDoes e-procurement gists in agonistical advantage?Does total quality focussing results in competitory advantage?Does implementation of e-procurement in total quality solicitude target help to discover further competitive advantage?4.0 HypothesesE-Procurement deposeful result in competitive advantage.Total quality focal point toilet result in competitive advantage.Implementation of e-procurement in total quality attention rout out provide further competitive advantage.Literature Review5.0 E-Procurement and Competitive amelioratement5.1 Conceptualization of E-Procurement no.adays, the evolution of e-procurement is becoming more winnerively and implicated on a global scale. fit to Min and Galle (2003), e-procurement is defined as business-to-business buying practice that utilizes electronic commerce to identify potential sources of supply, to purchase goods and services, to transfer payment, and to interact with suppliers (as cited in Pearcy and Giunipero 2008, p.26). Besides that, electronic procurement consists of e-Maintenance sterilise Operate (MRO), web- ground Enterprise Resource Planning (ERP), e-sourcing, e-tendering, e-auctioning, e-exchanges and e-informing (Min and Galle 2001 Knudsen 2003 Walker and Harland 2008). by from that, an Aberdeen radical (2001) found that e-procurement technologies ar divided into 2 categories direct procurement and indirect procurement (cited in Angeles and Nath 2007). Direct procurement is the purchase of high sight cranky materials that utilise in the manucircumstanceuring adjoin of a finished product (Harrigan et al. 2008). Whereas indirect procurement is the purchase of brinytenance, materials and operation goods that are not nowadays involved in the production process such as component part supplies, personal computers and advertising (Bof and Previtali 2007). Apart from that, procurement process involves a daedal series of events which allows a firm to more from the basic assume to range a final purchase decision finished technical stipulation and potential supplier evaluation (Robinson et al. 1967, cited in Osmonbekov et al. 2002). Hence, many firms in several(a) industries consume the strategy of e-procurement and focus on restructuring the entire order-to-delivery process preferably than specific task in order to rectify the qualification of purchasing or supply management function as good as squeeze operation woos of boldness.5.2 Conceptualization of Competitive AdvantageThe accomplishment of sustainable competitive advantage has long been the goal of companies and organizations. However, due to the fast change in the global environment, look forers from various backgrounds give way come up with their own different perspectives to identify definition of competitive advantage. In traditional industry, the importance of industry body structure and market position plays signifi tailt roles to touch competitive advantage (Porter 1980, cited in Ma 1999 Passemard and Kleiner 2000) .According to Pfeffer and Vega (1991), the conceptualization of competitive advantage passel be described as organizational practice, resource and asset that used to alter an organizations competitive position in the market (as cited in Longenecker and Ariss 2002). Porter (1985) further description on competitive advantage grows out of the firms unique might in creating surpassing node hold dear (as cited in Ma 2002, p.525). However, recently, Rindova and Fombrun (1999), state that competitive advantage is built on kinship and not an exchanges sustained social interactions in impressions which may meet future behaviors (cited in Tzokas and Saren 2004).5.3 Competitive strategies in E-ProcurementE-procurement has been seen to have the potential to play a pivotal role in a firms endeavours to create a competitive cost advantage that lasts for many years, hence grounding sustainable competitive advantage (Bloomberg et al. 2002, p. 14) cited in (Pires and Stanton 2005). In order to achieve sustainable competitive advantage, company should concern on the implementation of organizational business strategy in area of e-procurement. However, if the organization fails to apply a in(predicate) strategy, it leave result in loss of business productivity and fight which bequeath undermine the long-term surgical process of the organization. Apart from that, a firm enkindle levy its market position and competitive strength by developing procurement strategy. Below are the competitive strategies which e-procurement can achieve competitive advantage5.3.1 Cost ReductionThe reduction of purchasing cost has been recognized as one of the most significant purposes in procurement (Collis and Montgomery 1995), since the average manufacturing firm spends half of its sales revenue on the purchase of materials (cited in Ordanini and Rubera 2008). Furthermore, explore testifys that by using e-procurement can achieve cost saving which average reduction in purchase price of 17 per cent (Bartezzaghi and Ronchi 2005, cited as Harrigan et al. 2008). Additionally, by implementing e-procurement in an organization, it can help us to reduce purchase price of materials and be that related to intragroup work flow of activities such as equipment and labour be. With the use of electronic procurement, proceedings can be proceed through HTML, EDI, e-mail and Internet which can eliminate the usage paper requisition for placing order, invoice as well as receipt (Sarkis et al. 2004). Additionally, Companies using e-procurement have reported savings up to 42% in purchasing transaction cost associated with less(prenominal) paperwork, which translates into few mistakes and more efficient purchasing process (Davila et al. 2002).5.3.2 Efficiency MaximizationE-procurement can improve the efficiency of the process which order fulfillment condemnation can shortened up to 80 per cent (Minahan 2001, cited in Harrigan et al. 2008) as well as reduced the inventory level s (Min and Galle 2003). Thus, e-procurement has impact on the purchasing turn time and delivery time.In order to achieve high quality performance, in the main organizations has seen the benefits of applying new technologies in its manufacturing processes because it can manufacture in a high volume production without any concerns in regards to cost. The investment in advanced equipment has enabled the company to achieve a high level of process capability that could not achieve by manual processes. Due to on that point are many repetitive and complicated tasks that machines can do which gentleman being cannot do it.According to Bof and Previtali (2007), electronic procurement can speed up the flow of important information amid buyers and suppliers as well as elimination of transaction errors by transform the way of purchasing raw material from traditional methods to online. Currently, the use of net serve as a foundation of data flow for strategic manufacturing purpose in e-pro curement such as using barcodes in firms to manage the raw material. As the workflow automatically routes information through the purchasing process without re-keying all the date, user can use it easily and with a minimal error.According to smith and Correa (2005), they stated that by using e-business can lead to highly sinless information gathering though proper database via internet and it enable to indentify apiece product moving end-to-end supply chain. Apart from that, the information that record in the system are stored in a real-time fashion, therefore, users can acquire an accurate tracking in supply chain compared with the traditional manual methods. Therefore the adoption of e-procurement will improve efficiency that can streng consequently competitive advantage in firms and industries.In prevalent, firms should adopt the e-procurement strategies to achieve competitive advantage among the competitors. For instance, firms need to learn the management practices which are reduce production costs by elimination waste and achieving higher(prenominal) efficiency to capture the attention of the suppliers.6.0 Total smell Management and Competitive Advantage6.1 Conceptualization of Total Quality Management (TQM)Since 1980s, TQM has been regarded as one of the competitive strategies for firm to improve their competitive advantage and has widely implemented throughout the world (Kuei et al. 2001 Brah et al. 2002 rad 2006). Besides that, TQM has been widely regarded as rational structure and scientific tools for the profit of quality as well as improve competitive advantage (Sun 2000 Li et al. 2002).There is no universally agree definition on TQM as many questioners have their own beliefs and prejudices towards the term (Martinez-Lorente 1998 Sun 2000 Psychogios and Priporas 2007 Klefsj et al. 2008). However, the definition provided by inquiryers is more like vague descriptions than definitions and deliver term as a school of thought, which ?, an approach for ? (Klefsj et al. 2008). As just an example, Rad (2006) defines TQM as a philosophy which provides a template for advantage to an organization through customer satisfaction. On the other hand, in recent years, a tendency toward agreement on a system perspective of TQM has been suggested. angiotensin-converting enzyme such definition is from Hellsten and Klefsj (2000), who define TQM as a continuously evolving management system consisting of core values, methodologies and tools, the aim of which is to increase external and internal customer satisfaction with a reduced amount of resources (cited in Klefsj et al. 2008, p. 121).The definition provided by Hellsten and Klefsj (2000) is stated understandably as it consists of three components which are interdependent and load-bearing(a) each of the values to sustaining a subtlety based on a kernel of core values.6.2 Competitive strategies in TQMIn order to make do with the increasely of competitors, it has forced organi zations respect ways to reduce costs period maintaining customer satisfaction and making continuous improvement to the products. Since 1980, TQM has been recognized as a way to achieve goal by establishing a quality-based culture for improving customer satisfaction. Apart from that, TQM has been widely recognized as one of the most competitive weapon, if implemented successfully, provides a competitive advantage for organizations through quality (Martins and Toledo 2000 Beskese and Cebeci 2001 Prajogo and Sohal 2004). In order to achieve the goals of organization, they should implementing successful TQM strategies.6.2.1 Quality sharpenCurrently, TQM have become a key focus for organizations as it considers as tools for improvement quality. According to Mandel et al. (2000), he noted that the implication of quality as a factor of international visualisening. Quality improvement refers to the efforts on increasing effectiveness and efficiency in order to satisfy customer expecta tions (Talha 2004). Organizations must(prenominal) plan the strategic to implement quality improvement planning into their business plan. If the organization has emphasized quality as an important strategic, this will leads to higher sales and operating profits as well as improve the competitive positions of the firm as the customers will pay more to quality products that satisfy them.Also, nowadays customers are become more sophisticated, continuous improvement in product quality is essential to satisfy their needs. Therefore, once the organizations satisfy the requirements of customer, items are producing according to specifications, it will minimizing defective items and the cost of rework (Khan 2003).Yet, TQM will increase the organizations competitive advantage because they concentrated on the improvements to offer superior quality of products to its customers (Martins and Toledo 2000). Hence, quality improvement is essential for the very survival of a company to achieve compe titive advantage.6.2.2 Customer FocusCustomers have their expectations towards an organization which they patronize. If the expectations are not met, they will get dissatisfied and stop patronise the organization hence customer satisfaction is one of the important elements to stool competitive advantage. According to Bergman and Klefsjo (2003), satisfied customer are hardcore customers and loyal customers are profitable customers and profitable customers make lucrative businesses and happy owners (cited in Bergquist et al. 2005, p. 312). However, customers are usually irrational. In order to develop their potential quality, companies need to develop the strategies on customer focus.Generally, customer focus means as the activities of the companies are intended to benefit the customer but the customer is seen from the companies own perspective (Lagrosen 2001, p.350). Organizations should make an effort to gain information regarding the needs and wants of the customer rather than a lways focus on the companies view of product and its features.6.2.3 subprogram FocusThe goal of process management is to zeroing down the defective and failures rate as well as reduce process variation by building quality into the production process which can reduced cost. According to Ou et al. (n.d.), inferior quality manufacturing process will increase high scum rate and rework rate which will lead to use more resource to produce qualified products. Therefore, firms should concern on process management to avoid the occurrences of unnecessary costs such as waste costs by finding quality problems immediately. TQM implementation can directly increasing firms quality performance by improving manufacturing process, has indirect effects on increasing customer satisfaction as well as the disposition of firms.By reducing unnecessary waste cost such as waste of production, avoidable process and waste of defects, firms can put into practice of move production. According to Womack and J ones (1996), lean production has its origin in philosophy of achieving improvements in most economical ways with special focus on reducing waste (cited in Dahlgaard and Dahlgaard-Park 2006, p. 264). For instance, firm can designing the production process and giving orders and instructions to the workers. The improvement of manufacturing efficiency will improve customers satisfaction and eventually the companys financial performance.6.3 Adoption of e-Procurement in Total Quality Management to achieve Competitive AdvantageThere is no clearly evidence shows that the adoption of e-procurement in total quality management can achieve further competitive advantage, however it can be shows that the ways of both e-procurement and TQM are almost using same strategies to achieve competitive advantage.6.3.1 line of work-to-business (B2B) E-procurementE-procurement is defined as the use of information technologies to facilitate business-to-business (B2B) purchase legal proceeding for materials and services (Wu et al. 2007, cited in Walker and Harland 2008). With the development of B2B e-procurement, the traditional method of business are replaced by the electronically transactions. Besides that, BCB e-procurement can help TQM in achieving competitive advantage.6.3.1.1 Cost MinimizationApplication of e-procurement practices into total quality management is beneficial as it can improve facilitation of efficient and cost-effective concern routes to conduct business. According to Harrigan et al. (2008), e-procurement can reduce purchasing costs by amending the way raw materials are purchasing from traditional methods to online ordering. With the implementation of e-procurement, transactions can be proceed via e-mail, electronic data interchange, fax which can directly eliminate paper usage such as invoice, acknowledge as well as paper catalogs. However, Turban et al. (2006) argues that systematic procurement transactions tend to waste time on non-value-adding activities s uch as handling errors in ordering and invoicing, data entry which often time consuming and costly to trace (cited in Aboelmaged 2009).6.3.1.2 Efficiency MaximizationApart from the cost reductions arising from transactional, e-procurement can also contribute to efficient purchasing process in many ways. As earlier mention, TQM have been emphasized that its main focus is improving products quality, therefore it may be less paid attention on giving maximize efficiency. Consequently, by implementation e-procurement in TQM can achieve maximum efficiency. It is obvious that e-procurement greatly helps improve chat with suppliers providing access to the information 24 hours a day. Therefore, the system availability can makes it easier for businesses to receive order from the supplier and summit an order. By providing greater access, firms can reduce the purchasing cycle time and improved performance between buyers and suppliers. According to Choudhury et al. (1998), repetition in the pr ocurement system will increase the efficiency and result in a higher level of electronic integration between buyers and suppliers (cited in Walker and Harland 2008).6.3.1.3 Methods of B2B e-procurementPreviously, most of the organizations are using traditional modes of communication such as phone, fax, memo and face-to-face. However, through evolution of the technologies, organizations can improve the speed in business transactions through the utilization of the B2B e-procurement methods1. Reverse Auctions. A reverse e-auction is a form of the electronic data communication which provides a forum wherein several suppliers compete online for contracts offered by a customer (Tassabehji et al. 2006). Due to no human intervention on with computerized accessible format, it can help both parties gain form less paperwork, shorted cycle times for circulation requesters for quotations, winged responses to potential bidders and reduced transaction costs (Plouffe et al. 2001).2. Lean procurem ent. Lean procurement generally imply on small quantity of products purchased frequently from few suppliers, who deliver the items in exact quantities at the specific time and place (Wilson and Roy 2009). It also further noted that lean procurement unlike the traditional purchasing system such as TQM where the price shapes, suppliers are evaluated through the reliability, behaviors, performance as well as price. base on the traditional purchasing system, the relationship between buyers and suppliers are based on the long-term trust and commitment.3. Internet. Through internet, companies have ability to speed up the business transactions through a faster way as it allows companies to pay invoices and payment electronically. Besides that, the use of internet through videoconferencing provides a visual contract which allows companies communicate with the suppliers (Samaniego 2006).7.0 Theoretical role modelCompetitive AdvantageE-ProcurementTotal Quality Management8.0 Research Method s8.1 informativeMy research is about the ways of e-procurement and total quality management in achieving competitive advantage of organizations. In the literature review, I am explaining the relationship between e-procurement and competitive advantage as well as total quality management and competitive advantage therefore my research is an instructive have. According to Saunders et al. (2009), explanatory check is know as causal study which is emphasizes on explaining the relationships between variables.8.2 Research PhilosophyThe research philosophy that I adopt in the literature review is epistemology. Epistemology concerns what constitutes acceptable knowledge in a field of study (Saunders et al, 2009, p. 112). This research will be mostly exploring the strategies of how e-procurement and TQM to achieve competitive advantage. Besides that, although many successful cases that shows that e-procurement and TQM can provide competitive advantage to an organization. However, I may not be able to know that e-procurement and TQM can achieve competitive advantage. Therefore, I a deprivation to do this research to find out how e-procurement and TQM can help an organization achieve competitive advantage. Furthermore, the fact that it is an explanatory study also makes this research epistemology. Both the cause and the effect are known under an explanatory effect.In this research, I will acts as a positive(p). A positivist will prefer working with an observable social reality and that the end products of such research can be law-like generalizations similar to those produced by the sensible and natural scientists (Remenyi et al., 1998, p. 32, as cited in Saunders et al., 2009, p. 113). Therefore, I will only based on the quantifiable observations which I can see, hear and touch to develop hypotheses.8.3 ApproachDeductive approach is an approach of working from more general idea to a more specific idea and also known as waterfall approach and therefore, conclusi on follows logically from the premises (Gill Johnson, 2010). My research will utilize deductive approach since the theory and surmise have been created at the starting of the research. Besides that, the research itself is an observation to further swear the relationship between e-procurement, TQM and competitive advantage as well as allows me to test and confirm my hypothesis.8.4 MethodThe research measurements used in this study will be mixture of qualitative and numeric factors. A vicenary research aims at determining the relationship between one matter and another (Denzin Lincon, 2005). A qualitative research is used to address research questions that require explanation or understanding of social phenomena and their contexts (Ritchie and Lewis, 2003).In this research, I will more focus on quantitative research alternatively of qualitative research. By using quantitative research, I can find out the following data1. The percentage of organizations which are successfully ac hieving competitive advantage after adoption of either e-procurement, TQM, or both.2. The percentage of organizations which adopt neither e-procurement nor TQM, but have achieved competitive advantage.Besides that, I plan to apply structured questionnaire and interview which form by structured questions and answers. structure interviews use questionnaires based on standardized set of questions which can be result more accurate and credible data.Although quantitative research is the main focus in this research, qualitative research is still under consideration towards these issues. Under qualitative methods, I will be using semi-structured and in-depth questionnaire and interview. A semi-structured questionnaire or interview is where the questions are structured but the answers are go away unstructured. However, in-depth questionnaire or interview is where both the questions and answers are unstructured. Therefore, my research choice is mixed Methods whereby both quantitative and qualitative methods are being considered.8.5 StrategiesThe strategies that can be implemented in conducting this research are survey. Survey is a research strategy that involves the structured collection of data from a sizeable cosmos (Saunders et al., 2009). The reason for choosing survey as my strategy is survey allows me to collect the quantitative data which I can analyze quantitatively using statistics. By using survey, I can easily calculate the percentage of increase in profits after implementing e-procurement and TQM. Through the survey, questionnaire will be given. structure questionnaires bring convenience for me when carrying out the percentage calculation.Another strategy that can be implemented is archival research which makes use of administrative records and documents as the principal source of data (Saunders et al., 2009). In this research, archival research can used to identify the companies in the past that have been successful in achieving e-procurement and TQM and changing effects that has led to their success.8.6 SamplingSampling techniques are used to define the target population by keeping with the objectives of the study. Hence, sampling methods are techniques for collecting sub-volumes from larger volume of target population (Groves et al., 2010). Sample pickax will be done on a random primer coat to avoid selection bias. In this research, the sampling method that will be use is stratified random sampling. Stratified random sampling is a modification of random sampling in which you divide the population into 2 or more relevant strata based on one or a number of attributes (Saunders et al., 2009, p. 228). I will divide all companies in Malaysia into 4 groups which are companies that implement e-procurement, companies that implement TQM, companies that implement both e-procurement and TQM as well as companies that do not implement both e-procurement and TQM. In this case, companies will be selected using random sampling. Besides tha t, 50 questionnaires will be distributed randomly to every company.8.7 Time HorizonIn terms of time horizon, my research will be considered as cross-sectional study. cross-section(a) study refers to data gathered only once over a period of time. Since this research must complete at bottom 1 month, I am not be able to analyze the development of e-procurement in future. Therefore, my research will more focus on the e-procurement of e-procurement nowadays and explain the relationship between every variable. Besides that, this research typically deals with diachronic data, hence the necessity to get results frequently is comparatively low as the industry conditions will not change rapidly.8.8 Possible ResultFor the hypothesis of this research to be true, it must be supported by the fact that adoption of e-procurement in TQM can provide further competitive advantage. Besides that, the results of the survey as well as archival research should show that the companies that implement neith er e-procurement nor TQM can achieve competitive advantage.However, if the result of this research shows that the adoption of e-procurement in TQM does not achieve competitive advantage then the hypothesis of the research will be proven false.9.0 ConclusionBased on reading of literature, I can suggest that hypothesis of this research paper is accepted. It clearly shows that e-procurement and TQM on business can achieve and sustaining competitive advantage in business world nowadays. The development of e-procurement does give a huge impact on business management will go along technological revolution provides a number of challenges for firms today. An efficient e-procurement should implement competitive strategies to achieve competitive advantage as well as enhance market position in market. Besides that, a further competitive advantage can be gained by implementing e-procurement in TQM. Hence, it can be concluded that adoption of both e-procurement and TQM can bring organization to achieve further competitive advantage. However, in practice, TQM benefits are not easy to achieve. some organizations and companies have difficulties in implementing TQM due to lack of consistent senior management commitment, superficial knowledge of implementers of TQM as well as lack of strategic plan for change. In other words, TQM can have a dramatic impact on an organization.(4258 words)10.0 ReferencesAberdeen Group. (2001). Best Practices in e-Procurement The Abridged Report. 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