e-Procurement Hits Fifth Avenue

Saks taps IBM for Internet-based purchasing of indirect materials

Somers, NY  September 4, 2001  Saks Inc., the $6 billion department store company, will replace its paper-based procurement operation with an Internet-based procurement system from IBM in a bid to streamline its purchasing process.

The new e-sourcing service, which IBM calls Leveraged Procurement Services (LPS), will allow Saks employees to purchase operating supplies and services over the Web.

LPS combines Ariba Buyer software and strategic sourcing services from IBM Global Services (IGS) to provide Saks with online supplier catalogs. The virtual catalogs will eventually contain non-merchandise goods and services from about 5,000 suppliers, providing offerings ranging from office and janitorial supplies to in-store signage. IBM will continue to update the catalogs once they are in place.

"With the new e-sourcing service from IBM, we're not only simplifying the ordering process with a user-friendly application on employee desktops, but we're leveraging our spend to gain maximum cost efficiency on the goods and services our employees use everyday," said Tom Wyatt, executive vice president for e-business strategies for Saks.

IGS procurement specialists have helped Saks to select and enable strategic suppliers for 16 catalogs to date, as well as to negotiate prices for everything from pens and staplers to lighting products. The new service replaces a paper-based system that required the manual processing of thousands of transactions daily.

"Saks has recognized that it's necessary to re-engineer not just the way employees buy, but also the company's strategic relationships with suppliers," said William Schaefer, vice president of procurement services for IBM Global Services.

IBM unveiled LPS in May, and the service includes a range of e-procurement options, including strategic sourcing and supplier enablement, delivered through an Ariba platform.

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