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TransProcure CEO to Speak in Automotive Innovation Forum Asia 2007(June 27-29, 2007 - Millennium Hilton Bangkok Hotel, Thailand)


Procurement Asia Summit 2007 at Singapore Features
TransProcure CEO as Speaker


TransProcure CEO to Present in the 2007 Australia Sourcing and Procurement Summit

  Procurement and Sourcing Institute of Asia (PASIA) endorses “Indirect Procurement for Services” conference  

TransProcure Awarded Most Innovative BPO Company of the Year


TransProcure CEO to Present in Developing Sustainable Procurement Strategies in Oil & Gas Conference, Aberdeen, Scotland

  • Why TransProcure  
  • Why Philippines  
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  San Miguel cites millions in savings from electronic procurement system  
  By CECILLE S. VISTO, Senior Reporter  
San Miguel Corporation‘s move last year to centralize its $2-billion annual spending has already reaped “substantial savings” for the food and beverage giant.
The benefits of adopting an electronic procurement system will likely be reflected in the company’s 2003 financial statement, set to be released next month.
Last year, the conglomerate obtained some of its office equipment, such as computers and servers, by electronic bidding, resulting in about 10% to 20% in savings.
San Miguel did not disclose the exact amount it saved, but said this amount has already reached “several millions of pesos.”
By April, San Miguel will expand the e-procurement system to sourcing raw materials. This is expected to increase profit margin through lower cost of sales, if complemented with higher sales.
In 2002, the San Miguel group registered sales of PhP136.06 billion. Cost of sales reached PhP93.93 billion, resulting in gross profit of PhP42.12 billion. In 2001, profit was at PhP37.24 billion, following sales of PhP121.68 billion and sales costs of PhP84.34 billion.
San Miguel was largely efficient in 2002 and 2001, keeping direct spending at 69%, compared with 81.14% in 2000. With the new system, San Miguel wants to keep costs even lower.
“Bottom line is that we have efforts to continually bring down costs using tools like Ariba,” said a San Miguel official, referring to e-procurement software used in buying goods.
Savings from the use of electronic procurement may be seen in the second-quarter financial reports.
The San Miguel group adopts various procurement strategies to keep costs down. It uses hedging for agricultural products such as wheat and malt, spot buying for capital equipment, and long-term contracts for services.
“One of the major purposes of the cost-saving measures is to make sure their products are priced competitively in the market and to continue their dominance,” TransProcure chief executive officer Charlie Villasenor said.
The conglomerate inked a software licensing and services contract with TransProcure Corp. in August last year to automate and streamline its procurement.
The multi-million project, called the San Miguel Technology Enabled Procurement Unlimited Potential, involves the integration of Ariba, an e-procurement software, in all 11 units of San Miguel.
Pilot-testing started in October. All subsidiaries, like San Miguel Purefoods, Coca-Cola Bottlers Phils., Philippine Beverage Partners, Inc. and the San Miguel beer group, will eventually be wired to the system and shift to a centralized spending management setup.
“As San Miguel acquires more companies, the project is also geared to be extended to several other companies. There‘s a lot of money being spent by San Miguel and most will be channeled through our solutions and services,” Mr. Villasenor said.
San Miguel vice-president and Purchasing director Gerardo Payumo earlier said the project aims to transform procurement at San Miguel through increased spending visibility and information.
“The automated buying process will enable us to locate and work with the best suppliers available in order to deliver quality goods at competitive prices to our customers,” Mr. Payumo said.
Mr. Villasenor said that more and more Filipino companies, not just San Miguel, are looking at ways to manage its spending appropriately.
“San Miguel had said that if it does not streamline its spending, it will be placed at a disadvantage,” Mr. Villasenor said.
Money saved through wise purchase decisions may be used for marketing initiatives or schemes to improve sales or logistics.
For San Miguel, it could even buffer expected price increases
San Miguel Corp., largest food conglomerate in Southeast Asia, had reported a PhP17.9-billion net income in the third quarter of 2003, 15% higher than 2002 figures.
The gain was mainly boosted by gains in international beer sales, the Coca-Cola beverage group and the packaging business.
San Miguel is the largest publicly listed food, beverage and packaging company in the Philippines.
About TransProcure Corporation
TransProcure Corporation is the leading procurement services company in Asia. TransProcure helps companies manage spend thru Procurement and Supply Management knowledge and technologies. Their customers are large multinational companies and local Asian companies across various industries. They extend consulting services, education, training, strategic sourcing, e-Procurement implementation, Business Process Outsourcing (BPO- Procurement), e-Content services, executive search, events and conferences on the area of Supply Management. TransProcure also publishes its quarterly magazine, Procurement Asia . More information is available at www.transprocure.com.
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