Digital Procurement

CIPS define e-procurement as combined use of electronic information and communications technology (ICT) in order to enhance the links between customer and supplier, and with other value chain partners, and thereby to improve external and internal P&SM processes. E-procurement is a key component of e-business and e-commerce'.
E-procurement has changed the dynamics of the procurement and supply management (P&SM ) profession by, for example, placing a greater emphasis on knowledge management. It is suggested that e-procurement will change the culture of P&SM in an organization and may lead to a greater emphasis on cost and prices. E-procurement can release time to be spent on more value-adding aspects of purchasing, such as the development of end users' purchasing competencies and the development of suppliers. CIPS also advises P&SM professionals to consider how e-procurement can enhance their transactional purchasing by providing end users with quick and easy to use electronic systems, such as electronic catalogues for selecting and purchasing their requirement from preferred suppliers. This should reduce transactional costs by improving speed and efficiency and provide greater commitment to contracts by the reduction of ‘maverick purchasing.( CIPS knowledge , 2021)
E-procurement may be seen as the focus of local business administrators with one of the key goals being to devolve the buying process to local users, covering the requisition against contract, authorization, order, receipt and payment ( CIPS knowledge , 2021)

Some meaningful insights about Digital Procurement

According to supply management magazine ( Allen,2018), every £10 invested in e-procurement can help organizations achieve cost savings of £72, it has been claimed. Wax Digital said it surveyed 200 procurement professionals to arrive at the figure. It said savings were made up of two elements: supplier costs and internal costs. For every £10 invested in e-procurement, respondents said they were saving an average £38 on supplier costs and £34 on internal process costs, resulting in a combined ROI of 720%. Wax Digital said the survey showed “organizations are now starting to realize the wider business benefits the software enables and see a significant return on their technology investment”.

According to supply management magazine (Daniel , 2018) The African Development Bank (AFDB), which also sent representatives, told delegates from Tunisia, Cote D’Ivoire, Kenya, Tanzania, Mauritius, Zambia, Cabo Verde, South Africa, Sierra Leone, Uganda, Nigeria, Senegal and Togo signed the declaration. They agreed to:
• Identify, analyze, generate and share relevant information with regard to the implementation of innovation in technology in public procurement, taking into account the reality of each country.

• Promote the development of innovative policies, usage of open data, and action plans that encourage the implementation of technology in public procurement
According to supply management magazine (Churchill ,2017) The Victorian government has launched an e-procurement platform that will make it easier for SMEs to bid for public IT contracts. The new system will be used across the whole of the Victorian government, which makes about 900 purchases a year on its e-services platform from nearly 1,800 suppliers. The platform can be used to buy everything from content management systems to 3D modelling and IT strategy development.
According to supply management magazine ( Allen ,2018), Ghana has launched a new electronic public procurement portal as part of efforts to fight corruption.
Gideon Boako, a technical economic adviser working in the Office of the Vice President, said manual procurement was a “platform to breed corruption”, according to the state-run Ghana News Agency and also said that embracing electronic procurement will improve timescales around sourcing projects, increase efficiency and transparency and save taxpayers’ money.

According to supply management magazine (Hart ,2019) Nigeria’s Lagos State Public Procurement Agency (LSPPA) has completed a move to an e-procurement platform in a bid to transform the way it works and make the procurement process simpler and smarter. Fatai Idowu Onafowote, general manager of the LSPPA, said the new platform will enhance “probity, accountability, transparency, competitiveness, value-for-money and fairness” in public procurement as well as “fairness in the execution of Government projects and programmes.” By implementing the platform, the agency is moving towards “excellent and efficient service delivery to all stakeholders in line with international best practices and the state government vision of a smart city.”
According to supply management magazine (Hart ,2019), Henry Kerali, country director for Ghana at the World Bank, said cost savings driven by efficiency using the e-procurement system would bring to the country an estimated saving of $100m each year. The longer term reduction in costs will enable the government to use resources most efficiently. Estimates of the World Bank indicate the introduction of e-procurement could save up to 2% of the GDP in efficiencies, which in the case of Ghana amounts to $100m per year.

According to supply management magazine (Allen ,2021) Ghana’s Public Procurement Authority has revealed plans to award all public contracts through the Ghana Electronic Procurement System by the end of 2023. The electronic system aims to curb irregularities and unnecessary costs in the procurement process and guard against cartels being formed to bid for public contracts.

Digital Procurement Benefits

It appears that during the past few years purchasing has begun to play an ever more important role in the strategy of the firm .In order to survive, managers have begun to rethink their competitive priorities and their value chain. Increasing numbers of organizations have recognized that E-procurement holds the potential to transform their competitive performance for the better. E-procurement has made substantial technological advantages over the past few years and is expected to continue improving efficiency and productivity in the future. some forms of e-procurement will be highlighted (Corina ,2011).
1- E-ordering focus on the process of creating and approving purchasing requisitions, placing the orders and receiving the goods and services ordered using a software system based on internet technology.

2- E-sourcing allows identifying new suppliers for a specific category of purchasing requirements using internet technologies across spatial boundaries. Most important benefits of E-sourcing are increased decision making flexibility and lower prices.

3- E-tendering is the process of sending RFI (request for information) and RFP (request for proposal) to suppliers and receiving their response using internet technologies. Often e-tendering is supported by an e-tendering system that can analyse the responses received from the suppliers.

4- E-informing does not involve transactions but it handles gathering and disseminating purchasing information both from the internal and external parties.
The main benefits of e-procurement are an increase in firms’ competitiveness through cost reduction and/or boosted efficiency with inbound logistics . These benefits can materialize in a reduction of purchasing transactions costs, order fulfilment and cycle time, a reduction of the number of suppliers or even a reduction in the price paid, and the number of staff to support purchase transactions . However, in order to reap the full benefits, the business processes connected to procurement should be carefully analysed and (if necessary) improved before it is supported with an e-procurement solution (Trkman and McCormack,2010).

Those group of payment conditions that determine due dates of pay shipment amounts
(Selected pay power of creditability trust between buyer and seller )


Payment terms have three categories

Open term, in this term money transfer in advance or cargo shipped with open term credit limits and documents sent directly to the buyer, based on the trust of buyer on seller and reverse

Also some countries can not work under this umbrella
In case of shortage of foreign currency

This category examples :
100 % total advanced or part advanced and other before shipping (trust of buyer on seller)
Part cash or advanced and rest after Bill of lading date or after invoice date by 30 or 60 or 90 days ( greet of seller on buyer )

Document collector, in this term level of credibility trust between buyer and seller not high , this payment term secure the payment before collecting shipment dox from banks
Or get a bank guarantee on the payment before release dox to the buyer

This category examples :

CAD ( cash against documents ) , Documents sent to the buyer bank and be released till the buyer pay the due amounts

Avalized Draft :has payment credit facility, Documents sent to the buyer bank , but the bank issue letter or swift content that they guarantee payment on its due date without delay.

Letter of credit , this term mean that level on credit trust on buyer or central bank of buyer not exceed small percent or reverse, in this term bank of buyer ( applicant ) handle the deal with bank of seller ( beneficiary ) , also we may find correspondent banks to guaranty the deal , buyer bank pay the due amounts once they ensure document conditions sent from bank of seller .

INCO terms are deliver and transportation condition ,determine cost and Risk of shipping on who and to where
In logistics terminology seller called shipper and buyer called consignee
Most common used ( only )INCO terms as following :
EX work or FCR: that mean the consignee will pick the cargo from shipper warehouse, and all shipping risk and cost on him , shipper only load and delegate a responsible person or agent for clearance process and cost of this ( person or agent ) and operation on the consignee .
FOB: free on board that is mean shipper responsibility to deliver the cargo on the carrier vessel ( ship, flight or truck) and consignee will handle all rest process till his warehouse and pay the fright to the carrier and secure shipping booking and determine the carrier

CIF or C&F: that mean shipper responsibility to deliver the cargo to the port of discharge which determined on the Performa invoice , and determine the carrier and pay the freight ,but discharge terminal handling on the consignee till receive the cargo to his ware house. the difference between CIF and C&F is insurance ( marine insurance ) on cargo in case of C&F and cargo damaged in shipping risk and cost will be on the consignee.
DAP or DDU: that mean shipper will deliver the cargo to a certain determined place in consignee country or to his warehouse but cost of clearance (process & cost ) and Duties will be on the consignee. and in case of any delays related to clearance storage and demurrage will be on consignee
DDP: that mean Door to door deliver all cost and risks on shipper.

Storage paid against using of port land spot in container yard and its allowance or free time by agreement with port authorities or container yard. Stander time is 5 days for none IMO cargo and 0 for IMO cargo, some yards give IMO 5 days if it prepared to be IMO yard.
Demurrage paid against using of container itself as equipment in port of discharge, shipping line claim the consignee on delay of release that cripple the line to use this equipment to other shippers which effect there sales. Stander free time of demurrage is 7 or 14 or 21 days determine according to the deal that Made with the carrier before booking, also that mentioned on booking and bill of lading. Free time applied only on containers in the port once it released consignee get only 3 days to offload the container and return it back to port or pay a claim, to avoid this free time of demurrage must be companied to be applied in port and out it.
Detention paid also against of using of container itself as equipment in port of loading , shipping line claim the shipper on delay of loading the cargo. Stander free time of it from 3 to 5 days according to the deal with the line.

First you well get Pro-forma invoice from supplier (shipper) and check the info term and payment terms, discussed in other published topics, and must verify shipment Hs code ,size of shipment and best port to be mentioned in pro-forma ,Ooaaps will help you in this,
Determined the required documents ,also Ooaaps will help you in this .

In case of shipment exceed a certain value and importer (consignee ) in money laundering countries list. Money transfers must be from bank to create form 4 or form related to money laundry from bank for the Example Morocco, Nigeria ,Egypt and other countries.
So shipper must send bank details to supplier and supplier must do the same

Importer must have importation card ID (license) ,and permits (if it required ),Ooaaps will help you to know required permits.
In case factory , importer must create form admit that shipment is a raw material like form 5 created in Egypt and not allowed to sell it in same condition

Value admission form must be presented with documents as details of shipment

Many countries now a day have single window custom system which require cargo. Value visa number as know in Egypt (for example) ACI number and cargo visa x .
In case of private use for factories or persons it have limitations in Qtys and value
And factory must present form of private usage in stead of form of money laundry


Shipment will follow shipping process , out bound shipping confirmation ,loading , export clearance, get in, shipped, arrived ,discharged , inbound clearance and delivery.

Create pro-forma invoice to be confirmed from the client ,pro-forma must have clear payment term and INCO term (discussed in other topics )

Exporter ( shipper ) must have one of two types of export licenses ,first factory and it only can export their produced items and can get export subsidies ,Second trader can export any product but must get a delegation to export in behalf a factory or present evidence verify source of product and his not get any export subsidies.

Calculate CBM and create required documents (Ooaaps will help you to do this )
Verify HS code to know IMO condition (Ooaaps will help you to know this )

Shipment will follow shipping process , out bound shipping confirmation ,loading , export clearance, get in, shipped, arrived ,discharged , inbound clearance and delivery.


Export clearance can be made in final port of loading or transit by using one of dry port depend on license
Certificate of origin made in import and export authorities after clearance process

First Verify Hs code to figure the common markets (Ooaaps will help you in this)
Search for top ten suppliers of the materials or items, then you well find them participate in Fairs and show events. In those event websites and data will find same suppliers for this materials or items.
also if you used Ali Baba or ICIS , Select Companies who have ISO Certificates or Reach , international certificates only given to sustainable existed companies ,so it secured to work with them
Also for first deal make it Letter of Credit (discussed on other topics ) and mentioned in Documents third Party inspection Certificate (like polivary Tus or SGS) those parties confirmed quality of products and visibility . Also request chamber of commerce registration Number.

International Marine Organization, Made Classification for Dangers goods or goods have Especial Storage, packing and shipping conditions
It Classes as following :
Class1 Explosives
1.1 Substances and articles which have a mass explosion hazard.
1.2 Substances and articles which have a projection hazard but not a mass explosion hazard.
1.3 Substances and articles which have a fire hazard and either a minor blast hazard or a minor
projection hazard or both, but not a mass explosion hazard.
1.4 Substances and articles which present no significant hazard.
1.5 Very insensitive substances which have a mass explosion hazard.
1.6 Extremely insensitive articles which do not have a mass explosion hazard.

Class2 Gases: Compressed, Liquefied or Dissolved under Pressure
2.1 Flammable gases
2.2 Non-Flammable gases
2.3 Toxic gases

Class3 Flammable Liquids

Class4 Flammable Solids or Substances
4.1 Flammable solids
4.2 Substances liable to spontaneous combustion
4.3 Substances which, in contact with water, emit flammable gases.

Class5 Oxidizing Substances (agents) and Organic Peroxides
5.1 Oxidizing substances (agents) by yielding oxygen increase the risk and intensity of fire
5.2 Organic peroxides – most will burn rapidly and are sensitive to impact or friction

Class6 Toxic and infectious Substances
6.1 Toxic substances
6.2 Infectious substances

Class7 Radioactive Substances

Class8 Corrosives

Class9 Miscellaneous dangerous substances and articles *
MHB Materials hazardous only in bulk **

* Marine pollutants which are not of an otherwise dangerous nature are listed in class 9

International Marine Organization, Made Classification for Dangers goods or goods have Especial Storage, packing and shipping conditions
It Classes as following :
Class1 Explosives
1.1 Substances and articles which have a mass explosion hazard.
1.2 Substances and articles which have a projection hazard but not a mass explosion hazard.
1.3 Substances and articles which have a fire hazard and either a minor blast hazard or a minor
projection hazard or both, but not a mass explosion hazard.
1.4 Substances and articles which present no significant hazard.
1.5 Very insensitive substances which have a mass explosion hazard.
1.6 Extremely insensitive articles which do not have a mass explosion hazard.

Class2 Gases: Compressed, Liquefied or Dissolved under Pressure
2.1 Flammable gases
2.2 Non-Flammable gases
2.3 Toxic gases

Class3 Flammable Liquids

Class4 Flammable Solids or Substances
4.1 Flammable solids
4.2 Substances liable to spontaneous combustion
4.3 Substances which, in contact with water, emit flammable gases.

Class5 Oxidizing Substances (agents) and Organic Peroxides
5.1 Oxidizing substances (agents) by yielding oxygen increase the risk and intensity of fire
5.2 Organic peroxides – most will burn rapidly and are sensitive to impact or friction

Class6 Toxic and infectious Substances
6.1 Toxic substances
6.2 Infectious substances

Class7 Radioactive Substances

Class8 Corrosives

Class9 Miscellaneous dangerous substances and articles *
MHB Materials hazardous only in bulk **

* Marine pollutants which are not of an otherwise dangerous nature are listed in class 9