Implementation of E-procurement and its performance effect on ship management companies : Case study of IRISL

Abstract: The rapid growth of competition in the market and the consequent changes in economic conditions impose organizations and firms to implement new technologies to stay competitive. Those firms which have not implemented technology at the proper time are at the risk of losing customers or suppliers. Transportation industry in general and maritime transportation industry in particular are not exception in this regard. Customers, partners, agents, collaborators, shippers, port operators, suppliers and service agencies are involved in the ship transport industry supply chain, and one of the major requirements in such a supply chain in which all concerned parties are scattered all over the world, is the high speed transferring of data between them. In maritime transportation procurement process plays an essential role. Ships usually purchase a large quantity of supplies for maintaining daily operations. The procurement process in maritime industry should be organized in a way that enables efficient transfer of goods and services into vessels. Today, a major goal of a maritime’s supply chain management is to apply information technology to their procurement systems efficiently and cost effectively. Moving away from traditional and paper based offline purchase processing to online procurement enables shipping lines to gain better procurement practices in terms of cost efficiency.
In this study based on the literature review, seven most frequently mentioned factors found. These performance factors were: Cost, visibility of supply chain, cycle time, procurement control, inventory management and purchasing errors which were influenced by implementing E-procurement. An attempt has been made in this research to find the performance effect of e-procurement implementation in ship management companies. The qualitative research was chosen and case study was conducted in IRISL in this paper. The source of data for this study was personal interview.
The result of the present study illustrates that the in overall implementation of electronic procurement has enhanced performance in the Islamic Republic Shipping Company. Generally, e-procurement is found effective in increasing performance and it can be utilized as a beneficial tool, especially during economic crises in shipping companies.