Issues and criteria for selecting suppliers

Running Head: Assessment 2: Individual Assessment
ASSESSMENT 2: INDIVIDUAL ASSESSMENT

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Assessment 2: Individual Assessment
Table of Contents
Introduction................................................................................................................................3
Issues and criteria for selecting suppliers...................................................................................3
Appropriate ICT for operations related to purchasing...............................................................4
Purchasing cost analysis.............................................................................................................6
Conclusion..................................................................................................................................7
Reference list..............................................................................................................................9

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Assessment 2: Individual Assessment
Introduction
The main purpose of this essay is to analyze the effectiveness of different aspects of
purchasing management. These aspects include criteria for supplier selection, ICT for
purchasing process and purchasing cost analysis tools. Procurement is a basic functional
operation, which impacts on the cost of a product. Profitability of a company is decided by
the process of purchase management. In this essay, a local retail firm in Singapore is chosen
to analyze the aspects and recommendations is given to improve the aspects.
“All watches” is the company that is chosen to fulfill the purpose of this assignment.
This firm was established in 1984 in Lucky plaza, Singapore (Allwatches.com.sg, 2020).
They sold different watch products of 50 international brands. This includes rado, tag Heuer,
omega, mont blanc, and many others. This organization strives to provide luxuriously and
branded watches by offering a cozy environment at their stores. Among the top competitors
of this company, Seiko, cortina watches and Ventus watches can be categorized. The goal of
this company is to be a preferred luxury and mid-luxury watch retailer for the customers in
Asia and beyond by providing trusted service. Different suppliers like Seiko, Casio ad orient
are entering in the supplier market of this country. However, many suppliers are providing
online selling options that create a threat to retailers.
Issues and criteria for selecting suppliers
Several criteria are there that need to be considered while selecting suppliers. All
Watches have established a good reputation. The purchase need of this company is associated
with its brand image. They need to get products that can satisfy the needs as well as
expectation of their customers in terms of quality.
They need to consider the criterion of value for money in case of selecting suppliers.
As mentioned by Haekal & Setio (2017), quality must be checked while purchasing a product
before checking its price. All Watches needs to balance between several facts including

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Assessment 2: Individual Assessment
reliability, cost, service, and quality while paying a supplier. It must be checked that the
target suppliers are able to deliver quality products consistently. On the other hand, it is
important to assess the delivery speed of suppliers as it can directly impact the satisfaction
level of customers. All Watches need to select suppliers who are able to deliver products on
or before time. Flexibility is another criterion that needs to be checked while selecting a
supplier. As mentioned by Mathiyazhagan, Sudhakar & Bhalotia (2018), the purchasing
behavior of customers is changing over time and a flexible supplier can help All Watches to
cope up with this trend. The financial stability of suppliers must be checked as it indicates
the capacity of suppliers to deliver orders. Moreover, suppliers must be eager and
enthusiastic to communicate directly with All Watches at any time.
Suppliers may misrepresent themselves while communicating with organizations
for the first time and it is an issue that can be faced while selecting suppliers. According to
Trapp & Sarkis (2016), the management of companies needs to assess the eligibility of
suppliers by verifying their past reputation and business deals. Suppliers may not be green
suppliers and this issue may impact the customers. At present, there are many customers,
who prefer to purchase products that have been taken from green suppliers. All Watches need
to assess the origin of products that will be delivered by their selected suppliers. The
communication gap may be considered another issue that can be faced by this company
while selecting suppliers. They need to evaluate the words of customers through verifying
supporting business documents provided by suppliers. For example, they can ask for
documents that can support the ability of suppliers to deliver products on time. It is essential
for providing the value to the time of customers through this approach.
Appropriate ICT for operations related to purchasing
The purchasing goals of this retail firm are also pursuing innovation and leveraging
technology. The application of proper innovative technology such as ICT can help this firm

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Assessment 2: Individual Assessment
to source ideal goods and services. As stated by Wynstra, Suurmond & Nullmeier (2019),
using appropriate technology to procure supplies helps a firm to gain a competitive
advantage. This firm needs to adopt proper Information and communication technologies to
collect market information and procure goods that can be sold to gain desired organizational
objectives.
It can be recommended that “All watches” need to buy a business to business e-
commerce software systems. This includes commerce one and PeopleSoft. As opined by
Carulli et al. (2017), different B2B e-commerce platforms help in streamlining the process of
purchasing. In addition, communication can also be facilitated both internally and externally
through the help of this software. Different procurement software such as Jaggaer can be
installed, which helps to track suppliers and increases visibility of the procurement
operations. The supplier relationship management process can be done easily through this
system with the help of the internet and software. Several essential processes like finding
suppliers, performing spend analysis and management of RFIs can be done through this
software effectively (Bäckstrand, Suurmond, van Raaij & Chen, 2019).
Moreover, database technology needs to be implemented for achieving accurate and
timely input regarding supply management and performing strategic planning. The
purchasing process depends on lots of data that can help managers of the purchasing
department of this organization to make accurate decisions. Hence, cloud-based tools can be
recommended for this purpose. As mentioned by Ateş, van Raaij & Wynstra (2018), cloud-
based technologies are easy to deploy and generally flexible in nature.
A sustainable procurement process is recommended for this organization that can be
achieved by fulfilling technological requirements. This includes integrated ICT systems that
help in engaging all participants properly. For this purpose, the technical requirements
include cloud-based systems. This helps a form to store large amounts of data that can be

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protected safely. Besides, the integration of mobile phones is necessary for these integrated
ICT systems (Carulli et al. 2017). This helps to engage all participants in purchasing decision
making. Other essential processes like sourcing, contract formation, and analytics can also be
integrated into this sustainable system. In addition to this, suppliers can also be integrated
with this system to make the process easy and fast.
Figure 1: Different technological requirements in integrated ICT systems
(Source: Carulli et al. 2017)
Purchasing cost analysis
The purchasing goal of this company is to acquire the best quality products that can
be sold to customers according to present market demand. All Watches is renowned for its
brand image as they are selling the best quality watches in Singapore. They need to purchase
products based on the changing preferences of their customers.
Purchases can be categorized based on their impacts on the business. As mentioned by
Mori, Kobayashi, Samejima & Komoda (2017), the purchase can be categorized in leverage
purchase, low impact purchase and strategic purchase. Purchases of All Watches have a great
impact on their business as these purchases determine the satisfaction level of customers of
this company. This organization is spending a significant amount of money on purchasing.
Hence, it can be said that the purchase of this company belongs to the leverage purchase

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Assessment 2: Individual Assessment
category. Due to this reason, estimating the cost relationship can be considered as an
appropriate tool for purchasing cost analysis of this company. For estimating the cost
relationship, this company needs to compare cost data of similar past purchases. It is
important to compare and contrast the tooling and processing time of purchasing in this case.
On the other hand, Trapp & Sarkis (2016) have mentioned that value analysis is another
appropriate technique that can be considered suitable for analysis to leverage purchasing cost.
This technique is about assessing the performance of a product compared to its cost. This tool
can be considered as a proactive tool that can help the buyer to understand the value of their
total spending.
Total cost modeling is another effective tool that helps to analyze the purchasing
cost. However, this tool is slightly different from other tools as it focuses on a different
perspective of spending money. As stated by Hagman, Ritzén, Stier & Susilo(2016), this
technique helps to evaluate the total cost of dealing with suppliers regarding a particular
product within the lifetime of that product. This tool can be considered by All watches to
assess their spending for a particular product throughout its lifetime on the concerned
suppliers. Industry analysis is another good tool that can be used by this organization to
understand the different advantages of a supplier from the market. It helps to assess the
capability of the suppliers as well.
Conclusion
From the discussion, it can be concluded that it is essential to adopt proper tools and
techniques to achieve all aspects of purchasing. This helps to eliminate the risks of error in
this essential process, which helps a firm to gain a competitive advantage. Different criteria
must be followed by “All watches' ' for supplier selection. This includes flexibility and
delivery speed. While ICT techniques can be incorporated in this process of purchasing that
includes B2B e-commerce systems. Whole, integrated ICT systems can be adapted to

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facilitate decision making in the purchasing process. For purchasing costs analysis different
tools like value analysis, total cost modeling can be adopted.

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Assessment 2: Individual Assessment
Reference list
Allwatches.com.sg (2020), About, retrieved on 3rd January 2020 from:
https://allwatches.com.sg/about-us2/
Ateş, M. A., van Raaij, E. M., & Wynstra, F. (2018). The impact of purchasing strategy-
structure (mis) fit on purchasing cost and innovation performance. Journal of
Purchasing and Supply Management, 24(1), 68-82. Retrieved from:
https://pdfs.semanticscholar.org/101f/7bf34c2fe5b953891be8c6f85c576b17e12c.pdf
Bäckstrand, J., Suurmond, R., van Raaij, E., & Chen, C. (2019). Purchasing process models:
Inspiration for teaching purchasing and supply management. Journal of Purchasing
and Supply Management, 25(5), 100577. Retrieved from:
https://www.sciencedirect.com/science/article/pii/S1478409219300858
Carulli, M., Vitali, A., Caruso, G., Bordegoni, M., Rizzi, C., & Cugini, U. (2017, January).
ICT technology for innovating the garment design process in fashion industry.
In International Conference on Research into Design. 525-535 Retrieved from:
https://link.springer.com/chapter/10.1007/978-981-10-3518-0_46
Haekal, J., & Setio, H. (2017). Selection of Raw Material Suppliers Using Analytical
Hierarchy Process in Food and Beverage Company, South Jakarta. ComTech:
Computer, Mathematics and Engineering Applications, 8(2), 63-68. Retrieved from:
http://202.58.182.161/index.php/comtech/article/download/3747/3128
Hagman, J., Ritzén, S., Stier, J. J., & Susilo, Y. (2016). Total cost of ownership and its
potential implications for battery electric vehicle diffusion. Research in
Transportation Business & Management, 18, 11-17. Retrieved from:
https://www.sciencedirect.com/science/article/pii/S2210539516000043

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Assessment 2: Individual Assessment
Mathiyazhagan, K., Sudhakar, S., & Bhalotia, A. (2018). Modeling the criteria for selection
of suppliers towards green aspect: a case in Indian automobile
industry. Opsearch, 55(1), 65-84. Retrieved from:
https://link.springer.com/article/10.1007/s12597-017-0315-8
Mori, M., Kobayashi, R., Samejima, M., & Komoda, N. (2017). Risk-cost optimization for
procurement planning in multi-tier supply chain by Pareto Local Search with relaxed
acceptance criterion. European Journal of Operational Research, 261(1), 88-96.
Retrieved from
https://www.researchgate.net/profile/Masaki_Samejima/publication/312646209_Risk-
Cost_Optimization_for_Procurement_Planning_in_Multi-
tier_Supply_Chain_by_Pareto_Local_Search_with_Relaxed_Acceptance_Criterion/
links/59e016d7a6fdcca98420ed50/Risk-Cost-Optimization-for-Procurement-
Planning-in-Multi-tier-Supply-Chain-by-Pareto-Local-Search-with-Relaxed-
Acceptance-Criterion.pdf
Trapp, A. C., & Sarkis, J. (2016). Identifying Robust portfolios of suppliers: a sustainability
selection and development perspective. Journal of Cleaner Production, 112, 2088-
2100. Retrieved from:
http://users.wpi.edu/~atrapp/docs/Preprint_Identifying_Robust_Portfolios_of_Supplie
rs_-_A_Sustainability_Selection_and_Development_Perspective.pdf
Wynstra, F., Suurmond, R., & Nullmeier, F. (2019). Purchasing and supply management as a
multidisciplinary research field: Unity in diversity?. Journal of Purchasing and
Supply Management, 25(5), 100578. Retrieved from:
https://www.sciencedirect.com/science/article/pii/S1478409218301079

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