Hyundai Establishes e-Procurement System as Part of its B2B Solution By CIOReview Team

Hyundai Establishes e-Procurement System as Part of its B2B Solution

CIOReview Team | Wednesday, 22 February 2017, 09:06 IST

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The new system will handle the procurement work of Hyundai¢®¯s Telecommunications and Liquid Crystal Display (LCD) business units, from initiation of a purchase request to analysis of purchase status through the Internet. The e-Procurement system is now completing its final testing, prior to full launch at the end of this month. Hyundai¢®¯s e-Procurement system consists of three components: automatic request, automatic estimation with supplier¢®¯s extended Value Added Network (VAN), and automatic analysis of procurement status. - Automatic request: This component uses an electronic catalogue of general materials to automate the request process between the requester and the procurement department. It eliminates the printout of request forms and their physical delivery to the procurement department. Approval from the division chief is required to enable the request to electronically reach the person in charge of the procurement department. - Automatic estimation: This component systematizes routine procurement with established suppliers by automating the estimate request, selection of suppliers, and ordering process. It contains an Electronic Data Interchange (EDI) extension to convey necessary information to and from suppliers. - Automatic analysis of procurement status: This component gives real-time visibility of the procurement status across the business units involved. This component is expected to reduce the time required to analyze procurement trends from more than 10 days down to one or two days. Hyundai expects the e-Procurement system will reduce procurement costs by at least 30 percent, resulting from the analysis of procurement trends that will lead to adjustments in the management of stock. In addition, the new e-Procurement system will eliminate the unnecessary cost of additional communications regarding each individual transaction, storage of documents, and other overhead costs associated with paper-based procurement systems. Hyundai is scheduled to complete the second stage of implementation of its e-Procurement system by the end of this year. The second stage will enable an open purchase and sales system with foreign companies. In addition to cost savings resulting from the system itself, deployment of e-Procurement will also allow Hyundai to further reduce costs by selling a production facility that will no longer be needed.

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