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Procurement and Supply Chain Management

   

Added on  2021-04-17

10 Pages2415 Words29 Views
Business DevelopmentLeadership ManagementProfessional Development
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Running head: PROCUREMENT AND SUPPLY CHAIN MANAGEMENT1Procurement and Supply Chain ManagementStudent’s nameProfessor’s nameCourse titleInstitutionDate
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PROCUREMENT AND SUPPLY CHAIN MANAGEMENT2Procurement and Supply Chain ManagementIntroduction The Laburnum Group is a major company with diverse business under one fold. The company is keen on its performance which ensures that all stakeholders are contented. However, time to time organizations are faced with issues that may be affecting their processes. Part of entities under Laburnum, particularly energy and clothing, are currently impacted by challenges and inefficiencies which have brought about the need to re-evaluate the systems. This report aims to provide adequate evaluation and analysis on the businesses and the relevant factors involved. Sapphire EnergySapphire Energy and Eastern Power have quite a functional business relationship. EasternPower shows financial strength and capacity to deliver on the arrangements. The system displaysa good degree of reliability but the system can achieve much more. The reduced lead time is instrumental in enhancing the performance of the company (Treville et al, 2014). Customer lead time is essential for continued business relations. Reduced material lead time is important to the operations of Sapphire. The current system has regular production schedules which increases efficiency through reduction of the lead time (Christopher, 2016; Stadtler, 2015). The shipping system is effective in delivery of products. The costs associated are relatively standard for quality shipping. Procurement of the products in the established quantity has saved the company on carrying costs which makes the system sufficient. The Eastern Power storeroom size is essential in achieving this. Inventory holding costs are higher with less space
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PROCUREMENT AND SUPPLY CHAIN MANAGEMENT3utilization. This shipment of material reduces cycles required. Subsequently, this reduces the total ordering costs of the whole inventory. It is also important to be aware of the minimum orderquantities albeit the orders of Sapphire are above. Without the discounts, purchases made in minimum order quantity helps in cost saving. The system is more effective with appropriate tracking of the inventory movements (Wisner, Tan & Leong, 2014). Recommendations for ImprovementThere are some aspects that can be done to the system to enable improvement and better operations overall. The company should prioritize store keeping units (SKUs). These should conform to the objectives of the company and have the necessary class size to maximize investment. The SKUs should be repeatedly evaluated to ensure the company ahs adequate SKU intensity. The purchase of the cables should be done when customer lead times, acquisition lead times and order quantity relationships are suitable helps reduce inventory. The acquisition capacity should nevertheless surpass the demand (Hugos, 2018). Communication is of utmost importance. Clear and consistent communication with suppliers through the process should always be emphasized so that expectations of the customer are always met. Effective information systems should be applied to further reduce lead times (Hugos, 2018). This will automatically increase efficiency. Joint procurement procedures can be utilized to purchase products to help reduce unit purchase costs. This reduces the annual purchase transactions and cycle stock inventory. Cross-docking is also a vital strategy that can beapplied in the case. Terms of payment between Sapphire and Eastern Power should be extended to improve the effectiveness of working capital (Shih et al, 2012).
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