Purchasing in Supply Chains

Table of Contents

Part I - Introduction3

Supply Chains3

Purchasing in Supply Chain4

Objectives5

Part II - Literature Review6

The role of purchasing in supply chain6

Strategic Sourcing7

E-Business Technologies in Supply Chain10

Activity by purchasing functions14

Acquisitions14

Save and Storage14

Provide other areas14

Impact of Just-In-Time production on purchasing15

Part III - Applicable Tools & Techniques16

Practices16

Quality16

Price17

Functionality17

Sources18

ERP system and accounting18

Part IV - Implementation Plan19

Principles for managing the supply chain22

Purchasing Process25

Conceptual Framework on the Purchasing Function26

Part V - Discussions & Concluding Statements28

References31

Harness Values of Purchasing In Supply Chains

Part I - Introduction

Supply Chains

Supply chain management theory and practices are receiving a great deal of attention as effective tools for dealing with challenges that are generated by competitive and dynamic markets. A supply chain is defined as a set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flows of product, services, finances, and/or information from a source to a customer. The supply chain is concerned with the management of the flows, from where the raw materials are retrieved to the delivery of goods to the final consumer. Major business processes have been integrated in the concept of supply chain with time. This has been done through inter-form cooperation and inter-form coordination for the purpose of cost savings and customer services (Vakharia, 2002).

Each consumer gets exactly what is wanted, at the time that it is wanted. Demand information is transmitted instantly and without error, and the producers can react immediately to the new requirements, thus eliminating inventories of potentially obsolete product. The idealized supply chain is both effective and efficient .The reality of supply chain is very much different from what is idealized. Action is required from independent and different entities to make the delivery possible of a product to its final consumer which is actually a complex process. This is done often with little or no communication beyond immediate suppliers and customers. Each firm has its own stakeholders to whom it is beholden, and hence each one attempts to maximize its own profits and performance (Pagell, 2004).

Purchasing in Supply Chain

Purchasing refers to the main aim of delivery the utmost quality while keep the acquisition costs of raw materials and components low. In recent years, the theory of resource-based view (RBV) of the firm has been applied extensively to investigate how firms can acquire competitive advantages through managing their routine operations successfully. The role of the operations management component has been explored and it has been found that a firm can compete effectively in the market by adopting a more strategic, operations management approach (Levary, 2000). According to the results, a firm can gain a competitive advantage in the market by using a strategic operations management approach. The relationship between strategic purchasing and a firm's performance based on RBV has been investigated and it has been found that strategic purchasing has a positive impact on the firms' performance. RBV considers a firm's possession of heterogeneous resources, such as financial, physical and human resources, as a source of core competence within the firm (McCormack, ...