Emerging Issues in Procurement

The supply process is basically a communications process. Determining what needs to be communicated, to whom, and in what format and timeframe is at the heart of an efficient and effective supply management process. The essential steps in the purchasing process are:

Through e-Procurement system we can improve redundancies in the business process and operations, gain in productivity by upgrading procurement processes. Cost savings by reducing processing time, rationalization of a large number of BAL suppliers and maintaining relationship with Key Suppliers.

“E-Procurement is more than just a system for making purchases online. An effectively implemented system can connect companies and their business processes directly with suppliers while supporting all operations between them.” (Epiq technology, 2010). E-Mac digital company is the E-procurement website which is jointly owned by Mcdonald’s and Accel-KKR Internet Co.

Purchase of goods/services: At my job, the procurement manager is the one that decides the contract of vendors. He also decides what suppliers are to be used and approves all purchase

The author Remko van Hoek is Professor in Supply Chain Management at Cranfield School of Management, UK and Head of the Corporate Executive Board, Washington DC, USA. Keywords Internet, Supply chain management, Electronic commerce Abstract There is rapidly growing interest in e-businesses. Its impact on supply chains is currently covered in about 150 papers and articles and the number is growing at the speed of computing power. Unfortunately, most of the published work, in research and practice, is biased to e-commerce and sales and marketing. The supply chain dimension of e-business is largely neglected and managed poorly, while basic logistics mal-performance is currently hampering turnover and revenues of e-commerce applications severely. If basic operational performance is not even assured, more advanced approaches of e-business will not take off, simply because there is inadequate support for the concepts in the physical domaine. Very often virtual integration is applied in an operational manner and in segments of the supply chain only, as opposed to an alternative approach developed here, that of strategic and integral supply chain involvement. This research note calls for an effort to make the supply chain dimension of e-business a reality and suggests practical approaches (create an e-supply chain which is a supply chain that can fulfill orders and assure supply

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

E-procurement has had an increasingly important role in business-to-business(B2B) commerce. Web-enabled B2B e-commerce enhances inter-organizational coordination resulting in transaction cost savings and competitive sourcing opportunities for the buyer organization. E-business has radically altered the ways in which firms interact with their suppliers(Phillips 2003). Continued improvements in Internet technology connectivity provide an opportunity to make procurement for goods and services more transparent and efficient. Six forms of e-procurement applications

Procurement is one of supply management’s most challenging responsibilities (Burt, 2010). Therefore relationship management is the key to procurement success (Zhang, 2011). The purchasing of services has the potential to turn into relationships with suppliers that tend to focus on trust instead of the transaction (Burt, 2010). With that in mind, procurement should focus on long-term supply sustainability rather than short-term cost-saving (Zhang, 2011). To nurture an organization’s supply base into a fully committed and fully supported external entity requires time, effort and a highly collaborated working relationship (Zhang, 2011). Effective communication within the relationship is indispensable for any procurement outsourcing strategy to prosper (Simchi, Kaminski, Simchi, 2008). Failing to establish and manage good relationships could cause irreversible and catastrophic damage to a procurement outsourcing strategy. One of the most common outsourcing relationship problems is that organizations tend to sit at opposite sides of the work-group table instead of next to each other (Vitasek, 2010). The application is that the two organizations are working against one another instead of work with each other to solve an

In the case of out-sourcing a major function – the activities will remain the same, the majority (if not all) the employees and customers will be

2/8/2017: Business issue is identified with ineffective procurement process which leads to increased out of stocks and customer complaints. Further, the need to fix problems in open purchase order lines of supply chain department is well-emphasized.

After analyzing the BAL situation, and recommendations from the MMPC, I have come to the following realizations concerning the legacy systems we have in place, our alternatives and the directions we need to head in regarding future procurement practices, systems and supplier/customer management.

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available, it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.

Procurement’s keep getting changed and people just need to note the need and certainty with which their purchases will be imminent and a sound background is put in to action with resource allocation more discrete in different phases of development

With using this procurement route there are many advantages, such as the client retaining responsibility for the design team, the design team will report straight to the client to make sure quality controls are maintained. There is the assurance of price, as the client will understand the cost of the project, if all the work is fully designed in advance. This also allows a basis for variations to be priced at the rates given, it is also easier to analyse the prices. With this method the works can be done at the lowest price, getting the best value of money. (Consultations.rics.org, 2016)

Electronic business (e-business), the use of Internet-based computing and communications to execute both front-end and back-end business processes – has emerge as a key enabler to drive supply chain integration. As an overarching business concept, e-business has received increasing attention from academics and practitioners alike. E-business solutions in general are seeking to enhance supply chain effectiveness and efficiency through the automation of business processes. The adoption of e-business can result in benefits such as higher transparency, reduced transaction, manufacturing and other cost, reduced