Firms should seek to “get their own house in order” before seeking to manage suppliers

1809 Words Mar 11th, 2014 8 Pages
Assignment Title: Firms should seek to “get their own house in order” before seeking to manage suppliers
Purchasing is a vital process of the company, 100% efficiency is required at all times. There must be proper organization and flexibility in this department. People working in this department should constantly evaluate the current purchasing scheme of the company and adapt to changes at all times. Purchasing department or team of a company basically seek to answer these two questions: what we buy and how we buy. The answers to these two questions can change depending to companies size and sector. Indeed, by answering these two questions is the main goal of procurement team or department is to create best value for money and to
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All of these elements could still fail with the existence of problems that should be recognized and avoided at first glance namely (Londsdale, SP&SM, Lecturer notes, Week 3) maverick buying, fragmentation of spend, early specification, over-specification, unnecessary change to specifications, poor demand information, lack of clarity, adverse selection, inappropriate contracting, poor monitoring leading to moral hazard, and unnecessary purchase.
When fragmentation exceeds its neutral level, means that parts or branches in this situation are unconnected and/or missing and still expected to come up with results the same as what the entire system once did (http://www.ourfurutre.com/real101.htm) the whole is always better in presence as everyone will have a better understanding of each function. It is also good to note that
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