Unit 2: Individual Project Supply Chain Management and Purchasing

Unit 2: Individual Project Supply Chain Management and Purchasing

A change in the global business environment has brought about an integrative focus on the core organizational activities. This has led to the concept of interlinked firms in a newly networked supply chain mode. The latter strategic viewpoint has had an impact on all different types of activities affecting the entire supply chain (Chen & Paulraj, 2004). Thus, the supply chain management process and activities are increasingly becoming more organizational specific rather than industry specific. Keeping the latter statement in the context, this paper aims to answer three questions, from the perspective of a newly hired SMP by the service organization MLD Hospital. These questions relate with the developing and purchasing policies and procedures of the organization with a focus on ethics in the supply chain. These questions are answered as follows.

Q1. Discuss the importance of identifying the best suppliers by explaining the impact of source selection on supply chain performance?

According to Chen & Paulraj (2004) the re-conceptualization of organizational structures has rendered the purchasing function of an organization to take on a more active role in its operations. Furthermore, purchasing reflects a right type of relationship with the supplier(s) that needs to be strategically managed. Similarly, Kannan & Keah (2002) note that organizations have over the years leaned their organizational structure to focus more on its core competencies and achieving competitive advantage by leveraging their supplier's capabilities and technologies. In this bid, many organizations have even reduced their supplier base in order to further develop and maintain relationships with their key strategic suppliers. Through exploiting the supplier's capabilities, an organization is able to enjoy the improvements in its product quality, which helps it to improve its service provision. Coupled with, the seamless integration of technology into its different functions.

However, a greater dependence on the suppliers triggers the need for better managing them by the organization. This is called supplier management, which entails the effective selection of a supplier. Along with, developing innovative supplier development strategies and employing the relevant supplier performance assessment mechanisms (Kannan & Keah, 2002).

Moreover, quality, delivery performance and the costs remain the main determinants for supplier selection by the organizations, where the quality is conceived to be the most important of all the three factors. However, Kannan & Keah (2002) note that the purchasers make the supplier decision and selection by relying more on the basis of delivery performance and cost. Conversely, Bhutta & Huq (2002) comments that the involvement and the performance of the supplier chosen by the purchasing managers of any type of organization, is considered as a key element in the company's success or failure. Thus, this leads to adopting of better supplier selection approaches. These approaches require extensive dedication, expertise and cooperation to better identify the right supplier for the organization that could result in a long-term association between the supplier and the organization.

Hence, the above discussion highlighted how the selection of a right supplier ...