Sample Research Proposal Essay on Purchasing and Supply Chain Management

Introduction

Purchasing is a very important task in any organization. The purpose of purchasing in business has changed from the postconviction that procuring is primarily the part to obtain products and services to satisfy the company’s requirements. To appreciate how this role has developed over the years, we need to know what purchasing entails beginning with the chief objectives of purchasing department in an organization. Supply chain management has materialized as a fast developing matter where by reception of products and delivery to their destination. The logistics should be well-organizedto assure the purchasers that it is fast and reliable. The supply management is controlled by case studiesor surveys which are based on research and findings. Purchase, supply and logistics of these goods go together. When purchasing there are certain factors need to be considered whichinclude understanding the business requirements, buying of products and services at the right price, from the right source, with the right descriptions that meets the needs, with the right quantity and they should be delivered at the right timeso that they meet the needs internally and externally.

Purchasing and supply chain management involves acquiring of products, storing, monitoring of products sold, equipment used and added raw produce. The procurement manager is in charge of this department and his job is to manage the staff working in this sector.  In most organizations especially retailer, purchasing and supply chain management is one of the most significant work descriptions which involve analyzing the buyer’s behaviors and building a well-stocked storehouse.

One should be determined to start, advance and perform a long-term supply chain depending on identifying the needs for the clients. These needs include assisting the managers to recognize how the firm will offer importance through thepurchasing and supply chain (Carter& Easton, 2011). In this light, one should select supply chain partners who include suppliers, subcontractors, transportation providers, and distributors. It is very important to plan the physical movementsof delivery vans or trucks and information flows among the supply chains members. These plans are used by the firms to understand how they add value and identify the information needsso that the supply chain can function in the most effective and competent way. The purchasing department should ensure that the needed products are provided when required.They should also analyze the movement in the rapid moving supply chain so that itmakesit easy to conclude on decisions when goods are delivered (Nikbakhsh, 2009, Carter et.al. 2011).

Suppliers should be fast and reliable. If not, the purchasers can improve the efficiency by researching on the time taken between ordering and the physical delivery of goods. In the research, important happeningsmust be taken into consideration. These issues include breakdowns; delivery van to be stuck in traffic jam, the recipient’s working hours and the distance to be covered. To organize the purchasing procedure and supply chain competently and efficiently, procurement need to ensure that the following steps are followed i.e. recognize the opportunities, managing the internal procedures and attain set goals (Wu & Pagell, 2011). When recognizing opportunities, the procurement team improves on true value by assessing and selectingsuppliers whereby they act as the primary contacts with supplier and evaluate any qualifications or declarations of good work.They should determine the techniqueused togrant contracts and supervise the supply base.The procurement team is able to do this by providing leadership in procurement for the organization by:-

  • Managing the sourcing
  • Possessing and being responsible during sourcing processes
  • Communicating with suppliers and paying them off
  • Cooperation and creating teamwork in the organization.

The suppliers are competitively chosen through identification, evaluation and agreements with the new prospective suppliers and create long lasting business relationships. In cases where suppliers are becoming non-competitive, the procurement team engages them to see if they can develop an understanding. All agreements are legal obligation to offer certain services and payment should be made at a certain time (Wu & Pagell, 2011). These contracts can be exercised in a court of law if either of the parties does not his or her part of the deal.

All procurements should go through an appropriate procurement process which is recognized and approved by the organization. In this process, it is necessary to vet the suppliers; engineering and other practical inputs are measured to ensure worthiness. The sales people are not allowed to draft or enter into contractual arrangements without procurement’s knowledge and participation. Procurement team will evaluate the necessities for the material or service being offered of which, they may advise on substitute from a standardized or sub standardized materials that can save the organization money. They will also conduct periodical examination on requisitions so that they can allow greater leveraging of necessities (Monczka, Handfield, Giunipero, & Patterson, 2008).

The procurement team should manage its internal operationscompetently and successfully so that they ensure these objectivesare met the following guidelines must be adhered to (Nikbakhsh, 2009). These guidelines include:

  • Controllingthe procurement staff
  • Creating and preserving the rules, regulation and processes followed during purchasing.
  • Introducing newand appropriate technology and systems
  • Describing procurement approaches, procedures and structure
  • Developing policies and processes
  • Providing procurement governance to the organization
  • Providing professional training and growth prospects for employees

Inventory  management also takes an important part in managing purchasing and supplies chain management.  Stock taking in all the storehouse is must be taken and compared with the number of pieces purchased. If there is any difference, it gives managers and owners highlights and measures on which items are purchased regularly and the products stuck in the stores. The personnel involved in purchasing and supply management they must continually investigate, calculate and study consumer behaviors and be up to date on new trends on products on the market. To survive in this business, the organization must offer goods which are in demand to meet consumer’s needs.The supply chain management involves the management of inventory investment in the sense that the products stored in the warehouse are managed to determine the reorder points. In the research we determine the time take to deliver goods once they have been ordered. Inventory management determines which materials are to be used first so that we minimize on wastage.

A successful purchasing and supply chain management groups involve a number of significant players. These players include pricing specialists, market investigators and marketing personnel andsupervisors of different divisions. It is very important for each team player to communicate and compare notes on purchasing and marketing plans. The team is oughtderiveinto arrangementswith the suppliers of their goods, and guidelines on procedures to be followed if there is a likelihood of returning these goods it the item fail to trade. The purchasing and supply department needto discusscircumstancesbinding them before any product is paid and havea correct proceedings which fulfill with product’s agreement terms and conditions.

Prices and cost assessment are very important when evaluating and choosing a supplier. Suppliers are consideredaccording to the products they offer, their charges and location. In a perishable goods situation, we prefer to get a supplier who is close by and his prices are fair. For example we get a supplier a hundred miles away offering product at a cheaper price and he is charging delivery fee. On the other side we have a supplier who is five miles away and his prices are high but he is not charging delivery fee. In this situation it is better to choose the supplier who is nearer because we are considering time and convenience.

The need to follow the planned sourcing can generate uncertaintyinprocuring and supply organizations. The associationsbetween the purchasing specialists and the organizationsmostly it results in reimbursementinconsistencies as new employees have a higher pay and benefits.The need to uplift the pay level of purchasing officers, they regularlyend up in reducing the ability to buy goods free from being compromised by suppliers for their own benefits. Fresh recruits aregradually demanding to work from home or distant sites wherebyit presenting communication, harmonization in company rules is and regulations are challenged. Due to this professionals from other operational groups will accept these assignments in procurement (Wu & Pagell, 2011, Monczka et.al 2008).

Sourcing employees will progressively have double reporting relationships. This means that one will be communicating and to the supplier as well as the organization. This will require the company to improve on their communication channels which will be an additional cost to the company. In international procurement processes, the purchasing team enhances the organizational complexity by buying things through the internet. The increased sourcing needs a harmonizationand centralizing the purchasing activities so that they can reduce chances of corruptions or accepting bribes. The art of purchasing requires thebusinessto keenly supervise activities across business units to ensure the procedures are followed. A combined supply chain and purchasing perception willresults in a new managerial positions with responsibility for supervising and organizing supply chain activities.

To improve the administration of a firm’s supply chain, a purchaser can have a greatinfluence on supplier-related performance results. Some of the advantages will include lower costs, improved delivery speed, fewer quality complications, early insights into new technologies and timely product introductions. Each of the supply chain approach is designed to create formal socialization developments, supplier incorporation and supply chain flexibility so as to have a positive business benefits when they are effectively employed.

Negotiation is a very important skill of the purchasing and supply chain management. The capability tonegotiateefficiently and effectively is so important in that without it, no effective purchasing and supply management service can be acquired. Some people have a natural elegancein negotiations while others need to get this skill through a learning process in a professional training institution or continuous self-education and experience through the years. The procurement team should always lead negotiation in the organization to make sure the company is avoiding unnecessary spending and costs. Purchasing and supply management may engage in negotiation with manufacturers or wholesalers during the process of purchasing goods or materials. They can also work closely with cost specialists and marketing professional in order to decide on which products to buy and know which ones are not fast moving due. They should also analyze the costs to see if it is affecting the customer’s decisions. In the process to ensure that the organization keeps track on fast selling items in stock, they should also allocate batch numbers in goods to know what time these goods were delivered and their expiry date.While moving products from one store to another, they should check if there is any damaged goods and analyze them to know the causes for these damages.

The purchase team should engage in formal supplier socialization practices which include acting as a channel for transporting information and awareness which plays animportant role in operational buyer-supplier interactions. The official and speedy communication to suppliercreatesa positive buyer-supplier affiliation. Supplier cooperation has been linked to improved business performance across a range of businesses and scenarios. Close incorporation with suppliers results in greaterheights of trustworthiness, delivery times, flexibility and customer satisfaction, which makes the buyer more competitive in the long-term.

There are laws which govern the purchasing and supply chain management. These promise or a set of promises are drafted by the two parties are they are legal responsibilities which are called a contract. A contract is a tool by which entitiesor people create a private set of procedures to administer a certain business relations.For a contract to be operational these three elements must be incorporated, that is offer, acceptance and consideration (Seuring& Müller, 2008). A contract is a binding that can be exercised in a court of law. If either of the partiesbreachesthe contract, the law gives a guideline or an enactment of which it identifies the responsibilities of each party.A contractual connection between two or more commercial bodiesagrees to shift the risk among their entities in order to gain the specified resolution of the agreement.

There are relationship which the company involves itself with an agent who is supposed to perform duties on the company or entity’s behalf. This agreement is guided by law of agency which is also exercised in a court. The laws of agency are used to govern the relationship of principals and purchasing agents.  The principal is the corresponding person or entity for whom agents carry out duties under their authority. An individual or an agent might be personally accountable if he or she

  • Take part in fraud for personal gain or to venture in personal interests while performing as an agent for the firm includes taking enticements.
  • Disrespect the lawful security of items owned by others, such as patent violation
  • The misappropriation of registereddata by the unauthorized providing to others users.
  • Unlawful shipping of dangerousingredients and contaminated waste.

The modern trends of purchasing and supply chain management lies with the introduction of E-procurement systems. This software will assist to capitalize on the evolution of the Internet to expand their abilities in the existing software packages. The operating systems range from humble terminalcooperation to a full-scale original structures with the capacityof map products up to the minute. This system will place procurement authority at different heights and positions throughout the organization. Supplier will partner directly with suppliers by communicatingefficiently and competently with people and businesses who provide the organization with materials to produce a final product or service. As the use of technology enlarges in the business sector there has been a great deal of demand for a computer supportedtechnologies which will enable communication to flow to both ends (Seuring& Müller, 2008). There iscertain software which is used in the field of supplier collaboration.

The e- purchasing will be virtual hence elimination of paperwork, paperwork handling and filling which require a lot of space. The filing space can be utilized to other company requirements.  It will also reduce the time between need identification,approval process, the release of an order and delivery of an order.  The software will facilitate improve on communication within the organization, drivers and suppliers. There will be reduction of human errors, and a reduced overhead expense in the purchasing area. The purchasing personnel will spend lesser time on processing purchase orders and invoices, and more time on analyzing the value-added on purchasing activities. The purchasing team will generate timely reports within no time.

To manage a supplier population, there must be checks and plans created in that ensures total compliance. A good working plan will include applying intensive time keeping, quality, quantity and exact description of the ordered product. To be successful, one has to be appropriately planned and communicated during the creation of the plan, and then is dynamically performed and continually achieved to completion. As the plan is being established, the procurement team will identify which areas of the business will be obstructed directly or indirectly and come up with ways to make up for the lost details. During operation, measurement and execution of results and the identifying the key accomplishments help to ensure success.The advantages identified in the plan are delivered when complete and on good timing. Change of purchases will take place in accordance with a real time plan and successfully.Jeopardies have tobe measuredin the suitableemergencieswhich areerected in to the overall plan.

Creating a unifiedprocurement that supports the goals of the organizational, an effective purchasing strategy should be identified. These includes:-

  • Observing supply markets and trends that is increasein material price, deficiencies, and deviations in suppliers. Using this information, it will make it easy to interpreting the effects of these tendencies on company goals.
  • Discovering the dangerous materials and services required to support the organization in important performance capacities, mainly during new product development
  • Emerging supply opportunities and contingency strategies that support organizational goals.
  • Supporting the company’s need for a different and totally competitive supply chain

In-depth assessment, cost structure is required for major procurements. The cost structure is used to negotiate for a better price when supplying items which are of higher value. This begins with a list of potential suppliers, existing suppliers with respectableaccountsand are not ought to be ruled out.

 

 

 

 

 

 

 

References

Carter, C. R., & Easton, P. L. (2011) Sustainable supply chain management: evolution and future directions. International Journal of Physical Distribution & Logistics Management, 41(1), 46-62.

Monczka, R., Handfield, R., Giunipero, L., & Patterson, J. (2008). Purchasing and supply chain management. Cengage Learning.

Nikbakhsh, E. (2009). Green supply chain management. In Supply Chain and Logistics in National, International and Governmental Environment (pp. 195-220). Physica-Verlag HD.

Seuring, S., & Müller, M. (2008). Core issues in sustainable supply chain management–a Delphi study. Business Strategy and the Environment, 17(8), 455-466.

Wu, Z., & Pagell, M. (2011). Balancing priorities: Decision-making in sustainable supply chain management. Journal of Operations Management, 29(6), 577-590.