Sourcing for goods and services is crucial part of the supply chain yet one that until late has resisted automation. For many companies finding the best materials or services at the best price and under the most advantageous shipping arrangements is a laborious process.E-sourcing includes using web based technologies to automate and streamline the identification, evaluation, negotiation and configuration of the optimal mix of suppliers, products and services into supply chain network that an rapidly respond to changing market demands. Supporting the complete sourcing cycle will require companies to configure the appropriate mix of technologies, strategy and product and supplier expertise into e-sourcing frame work.

The world of web based purchasing, with market places, exchanges, and auctions, is still evolving. The advantages to being able to scour the world for the best goods at the price sounds great theory, but is not always great in practice. The business world is moving towards e-transport, e-logistics, e-sourcing and e-procurement. These web based methods helps into cost reduction strategies

E-procurement has following advantages

reduced transaction costs, in an area of the total spend that dwarfs what’s spent on indirect goods

reduction of stocks of obsolete products and inventory for those products, owing to more timely reaction of supply to demand

reduced level s in general, through reduced cycle times

quicker reaction to changing market trends enabling a manufacturer to gain competitive edge in new product development.

redeployment of procurement and other professionals away from transaction processing activities toward work that is more strategically important such as global

market research and analysis, long term negotiations with strategic suppliers, supplier development and researching of new technology tools that can elevate procurement and supply chain management performance