Purchasing & Supply Management

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Purchasing & Supply Management

Introduction

For more than ten years of development of competition driven by globalization, business leaders around the world have realized that good procurement and supply management allows for a number of strategic advantages. First of all, they include significant cost savings through collaboration with suppliers in low-cost countries, and increase the competitiveness of the supply chain, the optimization of the product development and reduce time-to-to-market (Arcelus, 2002). However, a change in the approach to the management issues of procurement and supply is often not reflected in the actual results. Some companies are experiencing a shortage of qualified personnel, which negates the efforts to optimize; others face problems because of too low or incorrect targets or because of differences between the procurement strategy and overall corporate strategy.

In many companies, the role of the procurement department is still limited to a narrow range of routine transactions, such as purchase of raw materials, components, and services. At the same time, some companies are units for procurement and supply output operations to a new level (Costantino, 2009). By working more closely with internal customers purchasing, some departments have made significant cost reductions in non-traditional areas such as marketing events and sickness benefits, where efforts to optimize costs above do not work. Other units on procurement go further, including in terms of their interests the production and administrative functions. Still others make purchases in the ground for innovation: bringing new suppliers of material and non-material goods, these units contribute to the expansion of activities in the field of new product development.

Any of the companies whose experiences we have learned, we cannot fully realize the existing potential in the field of procurement and supply management (Arcelus, 2002). Nevertheless, analysis of best practices companies can shed light on how to achieve maximum results in this field. First, companies have succeeded in optimizing procurement, paying more attention to the work with the staff: they are making efforts to develop the skills of specialists in the supply and at the same time looking for an effective way to ensure that everyone in the organization to combine a common purpose.

Second, these companies have set themselves ambitious targets, the planning of which not only takes into account the strategic vision for the future development, but also identifies the specific ways of achieving the intended results. Finally, companies with the highest rates in the procurement and supply management pay particular attention to the problem of supply units comply with corporate strategic priorities. This not only allows companies to make better use of the existing opportunities to reduce costs, but also creates the conditions for even greater benefits in the future, with the increasing trend of globalization. Such enterprises are pioneering a new approach to shape supply an approach that was worth look less successful companies.

Discussion

In this paper, we will describe the concepts of logistics and supply chain the concept of supplies and procurement will be discussed where the function is included in this ...