THE TASK OF PURCHASING AND SUPPLY MANAGEMENT Essay
It should be emphasised from the outset that purchasing and supply management is executed as an integrated part of the firm’s broader management (as part of the logistics management or supply chain management approach) Purchasing and supply PLANNING is part of the firm’s general planning, mainly because the continuous supply of raw materials components & services is of a strategic importance to the enterprise. The supply market is just as important for the firm’s survival continued profitability as the sales market is the firms own product. Firm’s general planning must be integrated.
The ORGANISATIONAL STRUCTURE of the purchasing and supply function should be aimed mainly @ linking into the firm’s overall structure in the most effective way. The purchasing and supply function primarily renders a service to the enterprise. Purchasing and supply COORDINATION should be aimed @ harmonising and aligning the activities of the purchasing and supply function with those of the other business functions. CONTROL is that element of management which ensures that activities are executed according to plan and within the allowed parameters.
PLANNING FOR PURCHASING AND SUPPLY MANAGEMENT THE NATURE OF PURCHASING AND SUPPLY PLANNING LEVELS OF PURCHASING AND SUPPLY PLANNING AND OBJECTIVES STRATEGIC PURCHASING AND SUPPLY PLANNING STRATEGIC PURCHASING OBJECTIVES TACTICAL SUPPLY OBJECTIVES >To enter into the long term contracts with reliable suppliers of strategic materials >To put together a project team responsible for developing suppliers >To study alternative inventory control systems or the flow of materials to and within the enterprise OPERATIONAL PURCHASING OBJECTIVES >To maintain sound relations with suppliers by means of ethical conduct and adherence to contract clauses and also to order on time >To study the situation in the supplier market and provide technical support to developing suppliers >To conduct an inventory analysis, reduce A category products and improve the understanding with suppliers or implement JIT ORGANISATION OF PURCHASING AND SUPPLY MANAGEMENT •POSITION OF THE PURCHASING & SUPPLY FUNCTION IN THE ENTERPRISE’S ORGANISATIONAL STRUCTURE CENTERALISED PURCHASING & SUPPLY ORGANISATIONAL STRUCTURE When a firm vests the authority for the purchasing and supply function in 1 person or team. Advantages: >Standardisation of materials and products is possible because purchases are made at one point >Purchasing and supply staff are afforded the opportunity to become experts >Control over all aspects of the purchasing and supply function is improved >Administrative costs are reduced by eliminating duplication DECENTRALISED PURCHASING & SUPPLY ORGANISATIONAL STRUCTURE Purchasing by different departments, branches or plants, while each of them enjoys an important measure of autonomy of decision making regarding the purchasing and supply function.
Advantages: >Better liaision can be effected between decentralised purchasing and supply functions and the user functions of individual plants served by the purchasing and supply function >The needs users can be better satisfied because the purchasing and supply function knows them better >Different plants keep their autonomy. Plant managers are often fully responsible for earnings of individual plants. COMBINED PURCHASING & SUPPLY EFFICIENCY STRUCTURE Based on the combined way, common requirements of the distinct plants such as equipment and certain types of raw materials, are purchased centrally mind of workplace.
The plants’ purchasing and supply functions will be assisted by corporate purchasing and supply in developing policies, procedures, and control steps, recruiting and training personnel, auditing the purchasing and supply performance from the plants •CROSS-FUNCTIONAL TEAMS Positive aspects: COORDINATING GETTING AND SUPPLY ADMINISTRATION As a activity for purchasing and provide management, skill is a mindful attempt to harmonise the tasks and activities of the function to make sure full cooperation in the quest for purchasing and supply objectives. The key coordinating systems of purchasing and provide management with other functions inside the organisation, and with suppliers and customers, are definitely personal computers such as digital data interchange(EDI), materials planning (MRPII) and distribution requirements planning (DRP).
TWO TYPES OF COORDINATION The flow of products and solutions from the distributor has to be powerful, the l and s i9000 function needs to ensure that dexterity between them as well as the supplier assures this arises. This can be attained by means of distributor alliances, integrated systems and inter-organisational groups. The distributor must become an extension in the buying organization. The chief coordinating mechanisms available to p and s supervision are available communication, strategic alliances, integrated systems, the conscious motivation of suppliers and standardisation of specifications, purchasing documents and purchasing methods.
CONTROL: EFFICIENCY EVALUATION OF THE PURCHASING AND SUPPLYFUNCTION Control may be defined as a systematic attempt to reach targets or arranged standards that accord with the enterprise’s goal, to observe actual perform- ance and assess it with all the set specifications, and to have corrective methods with a view to achieving the quest and goals of the venture.