Aspects of Purchasing Management Paper

   

Added on  2020-04-07

10 Pages3063 Words75 Views
Assessment 2: Individual AssignmentStudent Name:Student Number:Module Code:Submission Date:1
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IntroductionThis paper is an individual assignment provided by the purchasing manager of Charles & Keith in Singapore. Most importantly, the focus of the paper is to analyse the effectiveness of three aspects of purchasing management. The three areas of focus includes the supplier selection criteria and multiple sourcing, the purchasing costs in terms of categorical method, and the total cost of Ownership (TCO) & Activity Based Costing (ABC). Furthermore, the paper seeks to understand on how Charles & Keith Company applies its information and communication technologies (ICT) to respons to issues of purchase operations and management. Charles & Keith operates is an international company that specializes in retailing of fast-fashion footwear, bags and accessories. Charles Wong and Keith Wong established the company in 1996 in Singapore at Amara Shopping Centre. Some of the shoe types sold include flats, ghillies, heels, and loafers (Chan, 2017). While some of the bags include the tote, saddle bag, satchel, the wallet, and wristlet. Accessories include key chains, sunglasses, rings, necklaces, bracelets, and belts, and among others. The faster growth of the company has seen the company expand in four major international supplier markets including America (5 countries), Europe (14 countries), Africa (4 countries), and Asia/Pacific (34 countries) (http://www.charleskeith.com/sg). In overall, the company has established more than 300 stand-alone stores in 57 supplier markets across the world. Besides, the company has not become successful without experiencing some competitors from multinational clothing stores as competitors (Sherman, 2017). The company key competitors include Weekday, American Apparel, Gap, Urban Outfitters, Topshop, H&M, Zara, Cos, J.Crew, and Uniqlo. The company eliminated brokers retailers in 1997 to start designing, making, and distributing of differentiated fashion shoes, bags, and accessories at a relatively low price to customers (In re Charles & Keith International Pte Ltd, 2013). The company’s goal is to make sure that the fashion brands reach all countries and cities. Supplier Selection Criteria and IssuesCharles & Keith Company has designed three primary goals to assist in its purchasing department. The first goal interruption in the flow of raw materials at the lowest total cost. The company has managed to set up this goal as a way of ensuring that there is reliability in terms of meeting quality standards and delivering on time al needed materials. Just as Hasanian & Hojjati 2
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(2016) explain, is that any form of late deliveries experienced by a company can contribute to downtime and delays within the entire supply chain? Therefore, the purchasing department agrees with suppliers to schedule and establish communication the process that allows both parties to become aware of any forms of unexpected delays. Decision making concerning the nature and type of supplier depends on the criteria. Nair,Jayaram & Das (2015) refer to a supplier selection criteria as requirements that purchasing the department apply when they want to preselect all suppliers. The most effective question to ask at this stage would be, which type of a supplier is likely to qualify in principle to complete the assignment. Li & Amini (2012) outline, the two kinds of approaches for selecting suppliers as single sourcing and multiple sourcing. This paper would like to recommend that Charles & Keithmanagement adopts the use of multiple sourcing criteria. The Kraljic Matrix provided in figure 1 below explains how Charles & Keith management can manage its supply chain by segmenting the base of its suppliers (Gangurde & Chavan, 2016). For example, management can design strategies to manage and relate to suppliers to achieve its goals. The first thing is to map supply items against risks and profitability dimensions. In the first case, risks will explain unexpected events within the supply chains likely to disrupt smooth operations. Suppliers of inputs could suffer from different risks based on the length of supply chain, business model, or geographical location (Amini & Haitao, 2011). This implies that suppliers located in areas with unstable political environment would lead to delays insupply. While on the other hand, profitability dimensions would ensure that Charles & Keith management selects suppliers that make the company earn profits while avoiding those with costly inputs. 3
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