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#59 [06.11.2005]
 

How Small Businesses can Profit from Business Process Optimization

By Nowshade Kabir ©Rusbiz.com

How Small Businesses can Profit from Business Process Optimization

Many small and medium sized companies donít 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 donít have to be a multibillion dollar enterprise in order to reap profit by taking advantage of online business process solutions. Any business, whether itís 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.

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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 donít 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. (http//www.rusbiz.com) is one of them. In order to take advantage of Rusbiz supply chain management system, itís vital to become a member and take the following steps:

  1. Register your company with Rusbiz.com

  2. Add products that you sell to Rusbiz eCatalog

  3. Invite several of your buyers and sellers to Rusbiz if they are not registered with Rusbiz as yet.

  4. Once you have a circle of your own buyers and sellers on Rusbiz you can start using Rusbizís highly sophisticated yet simple in use supply chain management system.

  5. 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 ó if you have added a product there Ė buyers can fill in 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 it 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.

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About the author
Nowshade Kabir is the founder, primary developer and present CEO of Rusbiz.com. A Ph. D. in Information Technology, he has wide experience in Business Consulting, International Trade and Web Marketing. Rusbiz is a Global B2B Emarketplace with solutions to start and run online business. Click here to contact him.