E-Procurement not just for transactions anymore

The recession has jumpstarted online ordering and demand for other applications that automate processes for purchasing MRO items.

Every company purchases MRO items and is challenged by the category—its multitudes of part numbers and suppliers as well as the mounds of paper buying processes generate. And every employee thinks he or she knows best how to buy maintenance, repair and operations items.

E-procurement promised to change all that, and it has to some degree. Many companies set up e-procurement systems and began using e-catalogs, having employees place orders electronically for many MRO items available through distribution using negotiated pricing and preferred suppliers. These efforts helped to significantly improve efficiency and reduce purchasing costs.

But it's been a slow go. While last year 70% of distributors with annual sales over $20 million say they generated sales over the Internet, this figure actually fell from 79% in 2007, according to results of The 63rd Annual Survey of Distributor Operations. In 2009, online sales made up roughly 8% of annual sales for distributors responding to the survey.

Still, distributors have high expectations for e-commerce and are looking for online sales to grow 20% this year. In fact, survey respondents see e-commerce as necessary to stay competitive, and one in three distributors say they are investing in the technology.

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