Essay on Purchasing Management
Added on 2020-04-07
11 Pages2967 Words210 Views
Running head: PURCHASING MANAGEMENT1Purchasing managementName:Institution Affiliation:
PURCHASING MANAGEMENT2Introduction The objective of the essay is to analyzing of effectiveness of aspects in relation to the purchasingmanagement. These aspect are supplier selection criteria and issues, ICT for the purchasing operations, ICT for the purchasing operation and the purchase cost analysis (Ateş, van & Wynstra, 2017). In this research it has focused on the BHP Billiton which is an Anglo-mining multinational mining, metals as well as the petroleum dual-listed public company that has headquarters in Melbourne, in Australia. ProductsThe organization deals is involved in the production of the various products such as iron, steel, copper, silver, oil, aluminium as well as the gas (Billiton, 2014).Supplier marketsWhen it comes to the supplier market the organization has been able to develop on the world class supplier program which is able to create cluster of more than one hundred world class supplies (Barrick, Thurgood, Smith & Courtright, 2015). The company has a diverse supply chain which has helped it to market on their products. Additionally, they have been able to enter into an agreement with Codelco in order to make changes in regards to the internal processes such as the procurement to be able to develop the organizations in their supply chain (Billiton, 2014). There is a ready market for their products as the company has involved other major companies in other sectors to be able to improve on their suppliers innovation processes which help open new networks for their products. Competitors
PURCHASING MANAGEMENT3The major competitors of BHP Billiton organization are Rio Tinto Ltd, Potash, Wesfarmers, and SABmiller. Organizational goals and strategiesThe organizational goal is to own, operate large, long life, low cost as well as have an upstream assets that are diversified by the commodity and be the leaders both geographical and in all market (Chao, 2014). The company also has a goal of utilising technology which improve on the safety, and has a low coast and unlocks on the resources. To be able to achieve on this goals they have developed an operating model which enable them to leverage on their expertise across their business, using multifunctional teams who are connected across the organization (Chao, 2014). These individuals are able to share on their best practices and solve problems. Supplier selection criteria and issues The supplier have always been an integral aspects for the organization management policy. However, the relationship between the organization and the supplier has traditionally been distant one (Chao, 2014). When the supplier decision needs to be made in the made in BHP Billiton organization, the buyer should need to establish the set of the evaluation criteria which could be used in comparing of the potential sources (van, Voordijk, Matos & Vos, 2015). The supplier selection is the strategic decision which fulfils on the goals of the organization for long time at low risk (Price, 2015). In accomplishing on this objective BHP Billiton organization has moved from the reactive buying to the proactive buying which is much more priority to the co-creation of the wealth with its suppliers. Purchasing goals for BHP Billiton organization
PURCHASING MANAGEMENT4BHP Billiton organization has a purchasing department in which is responsible for any purchasesin the business. Additionally, the organization is governed by various purchasing goals which they observe in order to effectively deliver on the products (Price, 2015). One of the goal is to develop the strategies which to be able to discount from the vendors. The purchasing strategy usually varies form one industry to another (Kumar, Jain & Kumar, 2014). The purchasing strategy of the organization has been linked to the organizational objectives and these strategies usually support on the supply chain aims. The people in the company are typical conscious of these types of strategies so they could result to a successful enterprise. An additional purchasing goal would be to enhance on the quality to manage to get the customer loyalty in addition to good reputation in the market (Price, 2015). The good quality program that BHP Billiton offers help them to contend it more competitively on the market. The quality they enhance by means of hiring of the most effective professionals that have good negotiable skills, the legal knowledge aswell as better understanding of the company. Another purchasing goal is the reduction of the inventory maintenance cost. Whenever the business gets hold of the huge amount of the inventory for lengthy period of time then they will need to bear with the spoilage of the cost (Monczka, Handfield, Giunipero & Patterson, 2015). The inventory in the organization could depreciate if they are stored for very long time which would require some maintenance. BHP Billiton to reduce on this cost they avoid the inventory maintenance cost through use of the just in time inventory system, this therefore means that the inventory is delivered once they get contract for the supply (van, Voordijk, Matos & Vos, 2015). This aspect of managing of the inventory is very vital to be able to keep the client satisfied(Price, 2015). BHP Billiton organization makes sure that they delivery their product on time and they have vendor who can deliver on time. Additionally, they makes sure they have the best
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