Purchase Management

Running head: PURCHASE MANAGEMENT
Purchase Management
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1PURCHASE MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Supplier selection criteria and Issues.........................................................................................2
ICT for purchasing Operations...................................................................................................4
Purchase Cost Analysis..............................................................................................................5
Conclusion..................................................................................................................................7
REFERENCES...........................................................................................................................8

2PURCHASE MANAGEMENT
1.0 Introduction
Kentucky Fried Chicken, better known as KFC is a name in the fast food industry that needs
no second introduction. The company is easily recognized by the well-known face of Colonel
Harland Sanders, the founder of the fast food giant. KFC started operating in Singapore in
1977 after the first KFC restaurant stared operating in Somerset Road (Randhir et al., 2016).
Currently the company has more than 80 franchises across the country and has successfully
cemented its place in the Singapore fast food market as one of the biggest companies in the
industry. Furthermore, KFC Singapore was recognized as the first KFC branch in Asia to
serve the popular KFC Zinger burger (Shen & Xiao, 2014). The company has been subject to
the similar fate as the rest of the KFC branches all across the world. The company has been
able to provide the consumers of the market with the best quality fried chicken that is made
up of an assortment of the secretive five herbs and spices. The fast food industry in Singapore
is highly competitive and the company has numerous competitors. Some of the biggest
competitors of the company in Singapore are Jollibee, Carl’s Jr., McDonald’s, Burger King,
Subway and others. The products that are offered by the company include their famous fried
chicken, burgers, French fries, Grilled Chicken, Saucy Chicken wings, smoothies and soft
drinks. The suppliers of the company include the frames that supply halal chicken throughout
the franchises of the company, and the suppliers of the material that are required for the day
to day operations of the company. The aim of the paper is to analyses the effectiveness of the
purchase management practices that are carried out by the company along with the critical
analysis of the suppliers of the company, the purchase related operations and the purchase
cost tools analysis.

3PURCHASE MANAGEMENT
2.0 Supplier selection and evaluation
It is the role of the purchase management to deal with the inventories (Hugos, 2018). It is the
role of the purchase division of the country to carry check the requirement of the organisation
in terms of needs and requirement for the materials that are required by the company to carry
out operations on a regular basis. Hence, it the role of the purchase divisions of companies to
carry out purchase related activities that are required for the flow of operations of the
company. Same is followed by the KFC for the effective management of the inventory in
relation with the supply for the goods that are needed for the smooth operations of the
company and in order to ensure that the company does not run out of supply. It is also the job
of the purchase department of the company to ensure that the company does not run out of
supply of the raw material as they belong to the fast food industry that has high demand
throughout the world and Singapore as a whole (Humphries, 2013). Thus it is the goal of the
company to ensure that they have suppliers who have the capability to cater to the needs of
the company in terms of supply.
2.1 Single v multiple sourcing
Single sourcing refers to the practices of sourcing with the help of only one supplier. On the
ither hand sourcing form multiple suppliers allows the organisation to depend on more than
one supplier for the products or produce that they are subject to. Singe sourcing is risky and
the comoanies might run into the problems as a result of shortage of raw material s that are
needed for the purpose of production of the ultimate products from the part of the company.
Multiple sourcing allows the company and opportunity to operate more flexibly. A company
that is multiple sourcing need not depend on a single suppliers. The chances of running out of
supply is minimised. However, this leads to intensification of pricing competition which
allows companies to effectively get their products at the lowest possible prices. Multiple
sourcing is the sourcing strategy that is being applied by the KFC.