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Technology Applications in Purchasing

INTRODUCTION
Technological applications in the selection and procurement function are evolving rapidly.
Today, many forms of technology are available to help distributors and buyers
transact business. Those who decide to use these tools can considerably streamline the
cycle of purchasing, distribution, receiving, storage, issuing, and product usage. Many
of these tools are becoming a vital part of the procurement process.
TECHNOLOGIES THAT DISTRIBUTORS USE
Distributors use computer software applications to track and analyze many business
functions. A distributor is the “middleman” or “intermediary” between a source and
retailer  and therefore must keep track of information such as customers,
sources, costs, and specifications.
Customer Databases
Typically, distributors use specialized software to build valuable customer databases. For
example, these databases can help predict customers’ product needs and behavior so the
right products will always be available. Customer databases also provide information to
the marketing department for the development of special promotions. This software is
also used to estimate, or forecast, the number and types of hospitality operations that
might, or should, open in a particular area, allowing the distributor to make informed
decisions regarding hiring and expansion.
These days, the development and management of customer databases is more commonly
included in an operation’s Customer Relations Management (CRM) strategy
that places the emphasis on the customer. There are many CRM software applications
on the market that assist operations managers with customer information that includes
contact information, product preferences, buying habits, satisfaction levels regarding
service, just to name a few.
Ordering Systems
Distributors also utilize software applications to facilitate the sales process. For instance,
some distributors have all inventories counted, priced, organized, and stored in product
databases that their customers can access. This detailed information enables distributors
to manage and price their products quickly and easily. It is much more convenient for
everyone than the traditional method, whereby buyers receive printed product lists from
distributors that note product names, manufacturers, identification numbers, and other
descriptive information. To obtain product status—availability or current prices—
buyers must call either the sales representative or the distributor directly. The buyer then
must call in the order or place it with the sales representative. This traditional method
is still widely used, though many buyers use a fax machine or e-mail instead of the telephone
to communicate.
Some distributors have further streamlined the sales process and taken it to the
technological forefront by developing extensive online ordering systems, sometimes
referred to as “Web order entry systems.” Through this type of system, buyers and
large distributors communicate directly with one another over the Internet. This
method of communication permits buyers to order products directly and receive
instant feedback on pricing and availability. Such systems also minimize the ordering
function and the paper trail for buyers and distributors. Distributors typically
provide these services free of charge. Companies using these types of Web order
entry systems include U.S. Foodservice (www.usfood.com) and Sysco
(www.esysco.net). These companies are two of the largest broadline foodservice
distributors in the United States. Other companies that utilize Web order entry systems
include:
Cheney Brothers, Inc. www.cheneybrothers.com
Amphire Solutions www.amphire.com
HFM Foodservice (Pacific region and Hawaii) www.hfmfoodservice.com
J. Kings Food Service Professionals, Inc. www.jkings.com
Phoenix Wholesale Foodservice www.phoenixproduce.com
Schoenmann Produce Co. www.schoenmannproduce.com
Preferred Meats www.preferredmeats.com


 

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