Purchasing and supply management involves in the storage, procurement and monitoring of the products sold in the market, machinery and in the supplies. Purchasing and supply manager is the in charge of this division in anyone company or organization. For anyone company or the organization this department is playing the important role in monitoring the buyers behaviors and making sure the top sales of the product of the company or organization and as well as the stock of the product as of the needs of the buyers.
In any organization purchase and supply department is making the decision for the purchase of the raw material or other products which company need. Management is making the making the analysis for the cost of items to be purchased and as well as the selling of the products in the range of the normal peoples which is causing the need of product more in the market and that thing cause the more production of the product, and finally it shows in the profit of the company.
This department is the rear bone of the company which is playing a key role in the development of the company. Nowadays when the business are moving so fast in the way of development, purchasing functions are playing the important role in the strategy of anyone organization. Usually the business suffers from the organization because of poor management in the purchase of supplies. The purchasing of the services and good for the organization needs is known as the procurement.
The managers of the purchasing and supply department make the decision about the purchasing and supply of the good and services for the organization. A good procurement in purchasing and supply can give a good hold on the business of any organization. Suppliers for any organization some of them are using the cash and carry policy while some have other policy onside the prices of the goods and services also keep in the eyes before the managers are taking the decisions about the organization.
A sustainable procurement can make the organization very strong from reducing the waste, saving the money, improvement in the competitiveness and building a good reputation of the business among other competitors in the market. A better example of purchasing and supply strategy, operational policies and procedures can be seen from this study of SMILES TECHNOLOGIES. It is a medium scale enterprise in the Lagos, Nigeria. They focus on the sales and services of the computers and network items in the region.
In the research I was able to find objectives aside from the profit making of the enterprise. The strategy of the purchasing and supply of the enterprise is focusing in the Pull approach “JIT” to meets the demand and supply needs and also making the priority for the relation of suppliers and customer for maintaining an effective purchasing and supply management strategy. In the reviews of the enterprise practices it is seen the five elements of supply chain, matrix, trust, power, ROIC/ROCE to analyze and discuss the policies and procedure of the enterprise purchasing and supply management.
Maintaining the good relationship with the purchasers and suppliers is also much important for anyone organization. A good relation between organization and purchases/ suppliers is a great partnership, a win-win situation which is energizing both the parties. Suppliers/ purchasers treated with the honesty, fairness and courtesy will deliver the quality goods and the services with a best price in the market are causing the great trust from both the parties on each other. The decision of making partnership arrangements is one of the most important factors for buyers and suppliers.
Findings are showing the evidence that it’s much important for anyone organization to promote their communication structure encourage the consultation, dialogue and participation in the decision makings. This is particularly important where decision-making could benefit from the in-depth technical knowledge of middle and junior managers and shop floor workers. Competitive advantage is the ability which is gained through the resources and attributes to make a good performance at the higher level than other competitors in the market in the same product of the organization.
Competitive advantage is making the organization apart from the others in the market and becomes a distinctive edge of the organization and is the core competencies of the organization. Organization is always trying doing something which makes them differ from the others in the market. Competitive advantage occurs when any organization develop their attributes that allow the organization for outperform from its competitors. Attributes are consisting of availability of natural resources, highly skilled and trained manpower and cheaper energy resources over their competitors.
For the example of this we can see the mobile companies. Nowadays mostly of the mobile companies are producing their products in the other countries as the iphone is producing the phone in the China, Samsung phones are also mostly produced in the Vietnam and China also. The main reason of the producing the product in those countries is skilled and trained manpower, cheap energy sources and low cost producing of the products of the companies. Creating a competitive advantage in the market is really a health thing for anyone organization.
Creating a competitive advantage can be in the shape of the success or the failure of the company. But if you are creating competitive edge among your competitors for the competition it can make your organization on the top in the market. Having a competitive edge means your organization is processing an advantage over your competition. It will be a good strategic planning for your organization. Once the organization developed the competitive edge, they also need to maintain it on the daily basis challenge.
Once it is developed it will make the demand to make a look on the competitors and their future plans in the market. In the mean while time organization also has to take a look on the needs if the customers in time by time because of circumstances. Organization must be flexible to accept the changes as of the customers’ needs. Purchasing and supply management also have an important impact in the services quality and products. If we take a look around in the different organizations we can see they are looking to increase the proportions components and parts as well as services also.
They are making outsource in order to make the concentration on their area of competence and specialization. In the below example I will describe the important link between supplier quality and product quality. Heparin is a main product which is used in the dialysis and medicine that prevent the blood clots during the surgery and it make the blood thin. In last days there was four American peoples cause death because of the Heparin and more than three hundred patients got the allergic reactions, the Heparin was used in all these cases was prepared by the Baxter international.
If we take a look all over the world we can see the most Heparin used is imported from the China. Recent deaths highlight that there is need to control the sourcing accountability. In the process of making of heparin they use pulp extracted from the intestines of the pig, which is much heated in the large vats. Conclusion Organization is currently facing some problems as because it is working with a very disorganized system and almost an inefficient system. It is losing a lot of money and time on very basing things such as order duplication and failing to pay suppliers at proper time and good quality.
Also they lack in the basic knowledge of purchasing good and raw materials this resulted in waste of time and money and also effects on quality at the end. Company reputation and good will is also not so good because of non payments of invoices with suppliers. There are solutions of these problems such as the company can hire a professional buyer who is specialized in purchasing goods so he can reduce the possibilities and changes of mistakes and error being made in purchasing good and in their quality. it will also save the time and orders can be delivered on time to the suppliers and order not being duplicated , items overstocked.
The other viable economic option is that the one f the three managers could be trained to assume the role and take responsibilities for these tasks. One person would then make decisions, an advantage would be that they already have a working knowledge of the company and they are also known to the other managers from the outset. A centralized approach with just one national supplier would make purchasing easier and more cost effective for the company as they will reduce the amount of paperwork by receiving one invoice rather than several. This will assist ease of stock control and management.