Purchasing in a Supply Chain Network

[Course]

[Name of Instructor]

[Date of Submission]

Table of Contents

Purchasing in Supply Chain Management3

Introduction to the Problem3

Aim of the Research4

Research Questions4

Outline of the Research4

Interpretation of primary literature5

Objectives of Procurement Management8

Stages of the Procurement Process in the Enterprise:9

Effective Procurement Strategies11

Evolution of Procurement Process12

Traditional model of procurement process "Pushed"13

Factors Affecting the Status of Procurement Services14

Model Procurement Process “Pulled”14

Conclusion16

Works Cited18

Purchasing in Supply Chain Management

Introduction to the Problem

A relatively new management process that had great momentum in the past decade and generates significant cost reductions by allowing companies greater competitiveness and higher profits. In the new millennium, competition occurs between supply chains rather than between individual companies. The management of the supply chain revolves around the efficient integration of suppliers, manufacturers, distributors, and retailers in this way is achieved substantially reduce costs and at the same time improve customer service levels. The management of the supply chain covers the following areas: network logistics, warehousing, inventory management, purchasing, strategic alliance, information technology and telecommunications as key elements in communications and decision making. Companies that want to succeed need to streamline their processes in all areas.

High levels of competition in the international markets have led companies to the conclusion that to survive and be successful in aggressive environments, it is not enough to improve their operations and integrate their functions internally, but it is necessary to go beyond the boundaries of the company and initiate exchange relations, information, materials and resources with suppliers and customers in a much more integrated manner. For this, companies have to use innovative approaches that benefit all stakeholders together in the supply chain. One of the most important aspects of supply chain is the buying decision for the company. It is considered that the internal factors influence a company to have the procurement.

The transformation of the sellers' market to a buyer's market is complete in almost all industries. The offer is greater by far than the demand; the buyer can hardly distinguish the product properties and are becoming increasingly price sensitive. The companies responding to the situation in which they design the product life cycles get shorter or correct the prices down, whether price-skimming or short product life cycles are pursued as a strategy to ultimately decrease the piece proceeds. Thereof, the expected operating margins resulting subtracted the maximum allowable production. It must be looked for ways to represent this target cost.

Aim of the Research

To understand the concept of procurement and purchase in supply chain management

Research Questions

What is supply chain management?

How is purchase and procurement carried out in supply chain management?

What is the importance of purchase and procurement in supply chain management?

Outline of the Research

This research will have the following outline:

Introduction to the problem

Aims of the Research

Research Questions

Interpretation of primary literature

Methodological Approach

My viewpoint

Conclusion

Interpretation of primary literature

The role of purchasing is a gateway to suppliers so that other business functions can be communicated to counterpart within the supplier organizations. Garvin (1984) suggested that there are eight basic elements of product quality in supply ...