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Global Purchasing & Supply

   

Added on  2021-02-19

14 Pages3706 Words121 Views
Global Purchasing &Supply

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Concept of Strategic sourcing, Procurement and Purchasing :...................................................1Difference between the strategic sourcing, Procurement and Purchasing :................................5To what extent are these functions applied in an organisation of your choice:..........................6CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9.......................................................................................................................................................10

INTRODUCTIONGlobal sourcing is refereed to as the process of sourcing of goods and services from thenational as well as across the national boundaries. The prime function and aim of the globalsourcing is to exploit the international efficiencies such as regarding the skilled labour at lowercost, raw materials at cheaper cost, low trade tariffs etc. whereas the the term global supply chainis defined as the process in which the exchange of the information is done among all thesuppliers and customers so that to support globalization strategies ascertained by the businesses.In this project the association chosen is Nestle which is one of the largest company dealing infood and beverages. The company is operating their business globally. Nestle deals in providingthe products like baby food, medical food, bottled water, coffee and tea, confectionery, diaryproducts, ice cream,icy food etc. This report have been initiated to understand the concept ofstrategic sourcing, procurement and purchasing within the global perspectives. Apart from thistheir roles and responsibilities along with the differences between them is also covered.MAIN BODYConcept of Strategic sourcing, Procurement and Purchasing :Strategic sourcing – Strategic sourcing is the key element for the business organisationas it provide the business with the detail about how to lower the cost and improve the quality oftheir products. This concept includes determining what products should the company buys inhighest volume, analysing the market place for those products, understanding about who will bethe supplier for those product and the use of the products, developing the strategy for theprocurement(Schoenherr and et. al., 2012). Strategic sourcing also involves establishment of thestrong relationship with the suppliers so that it can be beneficial for the purchasing departments.While conducting the investigation of strategic sourcing the association must consider thesequestion in mind as these would aid the business with proper management of their purchasing:Why the product and services should be bought?What is the use of these products and services ?In which market segment the supplier should focus ?What is the profit margin which a supplier wants to achieve?Where are these goods and services produced?1

Benefits of the strategic sourcing to the business of Nestle :As the company like Nestle is operating their business globally the concept of thesestrategic sourcing provides them with huge amount of advantages. These benefits are asmentioned beneath :These sourcing will helps the business of Nestle with increased profitability as thestrategic sourcing focuses more on the amount which have been saved during theprocurement and purchasing so that the business of the Nestle can gain a competitiveadvantage over the rivals(Sanders and Sanders, 2012).These strategic sources would help the business of Nestle in easily determining the riskswhich are associated with the business so that the management of the risk can be done inthe best possible manner.Strategic sourcing will also support the business with the better decision making processas for the better decision making process it allows the business to look into the otheraspects apart from the cost and reduction so that the efficiency can be increased andbetter decision can be formed.It has been evaluated that main benefits that Nestle can gain by strategic sourcing are -Creating Shared Value enables us to optimize value for our shareholders and have a long-termpositive impact on all stakeholders connected to our business, Enhancing quality of life andcontributing to a healthier future, Increasing the supplier relationships which highlight value andthereby surpass the traditional notion of price; Satisfying the company’s supplies for materials,goods and services delivered in full, on time and efficiently; Contributing to the growth andprofitability of the company, while seeking continuous improvement in the benefits provided bysuppliers through reducing lead time reduction or flexibility in supplies. Along with this,Planning must also address the Nestles and expertise that will be needed to implement the chosenpurchasing strategy. The trend to outsource (see Subcontracting/Outsource) both the initialconversion of raw materials, the manufacture of certain semi-finished or finished products andsome services, requires that the original expertise in purchasing these materials and services isnow needed to manage suppliers fulfilling a higher added-value process. Procurement – Procurement is termed to be the initial step in the business organisationas it involve determination, origin, approach and management of the external resources which anassociation required while accomplishing their strategic objectives. Procurement is generally a2

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