A Brief Report On Strategic Procurement

In this assignment I will be writing a formal report that will explain a typical procurement process, I will outline a variety of methods of supplier reimbursement and contract relationships; I will also outline the pros and cons of each contract type. As well as this, I will explain a typical supplier selection process through the use of Carters 10 C’s and a typical selection process model.

The topic selected is (Strategic Procurement & Supply Chain Management). For this study, we have selected Toyota Motor Corporations as our company of choice. Toyota is without doubt the best in the world, with its many philosophies and principles on how to make the best out of the least; JIT, lean production and elimination of waste and the desire for continuous improvement are just a few ways how Toyota has become the best in the auto industry. Toyota as a name, a company, and as a brand has become synonymous with Quality.

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

Unlike traditional supplier/buyer relationships that had a narrow focus, contemporarily such relationships are becoming more strategic thereby yielding adequate reduction of risk and good technological leverage etc. It should be recognized that this relationship is the most powerful process of consumer satisfaction.

Procurement is one of supply management’s most challenging responsibilities (Burt, 2010). Therefore relationship management is the key to procurement success (Zhang, 2011). The purchasing of services has the potential to turn into relationships with suppliers that tend to focus on trust instead of the transaction (Burt, 2010). With that in mind, procurement should focus on long-term supply sustainability rather than short-term cost-saving (Zhang, 2011). To nurture an organization’s supply base into a fully committed and fully supported external entity requires time, effort and a highly collaborated working relationship (Zhang, 2011). Effective communication within the relationship is indispensable for any procurement outsourcing strategy to prosper (Simchi, Kaminski, Simchi, 2008). Failing to establish and manage good relationships could cause irreversible and catastrophic damage to a procurement outsourcing strategy. One of the most common outsourcing relationship problems is that organizations tend to sit at opposite sides of the work-group table instead of next to each other (Vitasek, 2010). The application is that the two organizations are working against one another instead of work with each other to solve an

In order to institutionalize best procurement and acquisition practices in an organization, I would begin by forming a cross-functional team made up of supply management personnel, finance personnel, attorneys, human resources, engineers, and other subject matter experts. As was highlighted in chapter ___ of the class text, this is the best approach for ensuring that the broadest possible range of ideas and perspectives are incorporated early into the planning process. Additionally, it ensures that a great idea conceived of by one functional area is viewed from within the restrictions and/or limitations imposed by another. As with specifications development, this process allows the team to develop a reasonable, effective, and implementable plan that works across functional areas and provides the greatest return on investment.

The overall objective of this chapter is to give the reader a sense of the importance of purchasing and the supply chain and how they fit in to and impacts the business environment.

Purchasing and Supply Management agents use Strategic Sourcing as a two way continuous improvement process. It is different from Tactical purchasing on four levels or principles, it:

The traditional procurement route has become one of the standard approaches in the construction industry since the 19th century. The key characteristics of a traditional procurement route with a competitive tender process are competition or tendering cannot start until the design process is complete, the designing process is separate from the construction process and the lack of contractor involvement in the design process, with the design and technical development being carried out by the clients consultant. (Cartlidge, 2013).

Some of these problems in the supply chain often go unnoticed as the number of links between supply network members. Supplier Ethics Management is the “management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchaser’s overall risk of corporate integrity failure in the supply chain.“ (www.s-ox.com)

Kerzner (2009) defines procurement and contracting as the "process that involves two parties with different objectives who interact on a given market segment." (p. 840) As with every phase of project management, proper planning is key to the success of any project by ensuring the project gets the most out of any supplier relationships. This paper will define the project procurement planning process and how risk management affects that process.

An Investigation into the Best Current Practice of Supply Chain Management This report documents an investigation into best current practice of Supply Chain Management. Various methods of materials procurement are outlined in addition to their relevance to examples in modern industry. The report discusses the ideal characteristics of a successful supply chain. From a traditional perspective, this has proven to be based around the development of strong inter-firm relationships among the participating organisations that make up the supply chain.

With an evolving and highly competitive market, firms are seeking more innovative ways to create value and improve efficiency. Historically firms have tried to improve internal processes through housekeeping but in the recent past this have changed and attention has centred on the management of the firm’s supply activities. Open markets and a “flat world “as Thomas Friedman (2005) explains, has seen many new entrepreneurs boom with business ideas that step aside the conventional methods of business. Reduced effort and time from conception till marketing, sales are now achieved at a much faster rate, achieved through technology advances and specialised suppliers. Developing relationships with such suppliers is now an integral part of the

GREEN PROCUREMENTS AND MANAGERIAL DECISION MAKING IN SUPPLY CHAIN ENVIRONMENTS: A REVIEW OF NEWCASTLE UNIVERSITY APPROACH

Histoire des achats (tableau provenant de l’ouvrage : « The Definitive Guide to Supply Management and Procurement » écrit par le Council of Supply Chain Management Professionals et Wendy L.Tate en 2013 ) :