How Small Businesses can Profit from Business Process Optimization
by Nowshade Kabir
Published on this site: November 10th, 2005 - See
more articles from this month
Many small and medium sized companies don't take business
process optimization with the help of online solutions seriously.
This is understandable. When a company achieves price reduction
from a supplier, the money saved is quite visible. When the
company manages to sell products for a better price, the extra
profit margin is also clear and visible. Understanding real
return on investment from business process optimization requires
substantial analysis. Moreover, the benefits of such systems
are not always immediate and apparent; and there is this question
of natural fear of new technologies.
What ever the case, you don't have to be a multibillion dollar
enterprise in order to reap profit by taking advantage of
online business process solutions. Any business, whether it's
a manufacturer, a distributor, an importer, an exporter, a
trading house, a dealer or even a retailer, can increase productivity
by cost reduction and sales growth with the help of available
solutions. These online solutions come in various shapes and
sizes and can be tailored to the need of any type of business.
Example One:
A major financial services company decided to optimize the
way it buys computers and related equipment with the help
of electronic sourcing. The company already had a list of
suppliers it worked with. Initially with the help of eCatalog
management technology comprehensive lists of all required
products were created. The company decided to go for Reverse
Auction method in order to buy the products. Before the day
of real auction the selected prospective suppliers went through
a brief training on how to use the system and bid. Several
suppliers placed bids on the lots and adjusted their price
by watching other anonymous bids. The auction took only two
hours. The company managed to save 1.05 million per year in
cost savings on a budget of 7.5 million US$ and three months
of time saved in comparison to conventional buying method.
Example Two:
A supplier of stationery products used to receive orders
by eMail and fax. Receiving the high volume but low value
purchase orders and getting them into the sales order processing
system manually was time-consuming and created supply back
log which disgruntled customers. The company decided to implement
an eSales system integrated to their existing sales order
system with XML interface. As a result the company managed
to save 700 Thousand US$ from improved productivity and cost cutting.
Example Three:
A company decided to go into online wine selling business
where already over 30 companies were present. For superior
supply chain management and customer satisfaction the company
decided to integrate online solutions to the eCommerce site
enhancing the site to a true wine B2C portal. The solutions
encompassed back office business processes to support automated
warehousing, distribution and third-party delivery and call
center services. The site also embedded unique solution that
allows offering products based on customers preferences, clicking
through choices and prior buying habits.
As a result the company managed to build a leading eCommerce
site within a very short period in a highly competitive market.
The solutions like eProcurement and eSales can have real
impact on company bottom line regardless of its size.
Direct Benefits
- Cost Savings
- Increased Profits
- Improved productivity
- Lowering overhead costs
- Streamlining of supply chain processes
Indirect Benfits
- Ability to allocate freed resources to core business processes
- Improved service levels
- Access to a large number of suppliers in a relatively
short period of time
- Improvement in customer satisfaction management
- Stay competitive
What if you are a small company and you don't have enough
resources to implement a supply chain solution but you understand
that you could benefit from a system like this?
There are several B2B exchanges on the Internet that can
serve your purpose. Rusbiz.com (http//www.rusbiz.com)
is one of them. In order to take advantage of Rusbiz supply
chain management system, it's vital to become a member and
take the following steps:
- Register your company with Rusbiz.com
- Add products that you sell to Rusbiz eCatalog
- Invite several of your buyers and sellers to Rusbiz if
they are not registered with Rusbiz as yet.
- Once you have a circle of your own buyers and sellers
on Rusbiz you can start using Rusbiz's highly sophisticated
yet simple in use supply chain management system.
- Go to Rusbiz FAQ and read thoroughly the comprehensive
materials on the use of supply chain or deal management
methods.
The key elements that you will be able to use and profit
from them immediately is as follows:
- Request for Quote
From the catalog of your Web store, Rusbiz eCatalog or from
eMarketplace — if you have added a product there –
buyers can fill up a standard form of RFQ and send it to
you.
- Quote
Once you receive a RFQ, you can check, edit the form and
send a quotation to the buyer.
- Negotiation
The buyer either can accept your proposal or make a Purchase
Order from the Quotation you sent to him/her or make a counter
proposal. You in turn, either may accept the offer or send
back another offer.
- Purchase Order
From your final offer, if all terms and conditions suit
him/her, the buyer can create a Purchase order and send
to you.
- Invoices
You, upon receiving the Purchase Order, can create an Invoice
and send it back. There are also payment status and shipping
status tracking features integrated into the supply chain
or Deal Management system.
The Invoice generation feature also includes different discount
and tax options. You can choose options that suit you best.
You can use the above mentioned features as a buyer in your
procurement needs and as a seller in your eSales system.
Once you start using the system regularly and see the impact
it is making to your company productivity, you may consider
building your own personalized custom-made system.
Sooner or later most companies will be forced to automate
their business processes in order to stay competitive. By
early automating and adopting solutions like online supply
chain management you will be able to reap the far reaching
benefits that these solutions bring.
Nowshade Kabir is the CEO of Rusbiz.com. Companies can
optimize and handle some of their vital business processes
such as supply chain management with the features available
on Rusbiz.com (http://www.rusbiz.com).
Read more articles related to online business at http://ezine.rusbiz.com
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