Purchasing Management for 3M Singapore Pte Ltd

This report defines the important aspects, which are required to be considered by the purchasing department of 3M Singapore Pte Ltd., a subsidiary firm of 3M Company, at the time of making the purchase of raw materials. It includes management and selection of suppliers, use of information and communication technology to improve the purchasing operations and tools that can be used to analyze the purchasing cost of the company in an appropriate manner.

PURCHASING MANAGEMENT

Running head: PURCHASING MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Overview of the Company.........................................................................................................2
Supplier Selection Criteria.........................................................................................................2
Goals and Needs of organization............................................................................................3
Methods to find out the potentiality of Supplier....................................................................3
Use of ICT in managing Purchasing Operations........................................................................4
Needs and Goals of organization............................................................................................4
Recommended ICT.................................................................................................................4
Computerized Shipping and Tracking................................................................................4
Radio Frequency Identification..........................................................................................5
Use of social media to streamline supply chain..................................................................5
Tools to analyze Purchasing Cost..............................................................................................6
Goals and Objectives of organization.....................................................................................6
Tools and Techniques.............................................................................................................6
Cost Analysis......................................................................................................................6
Inventory Analysis..............................................................................................................6
Best use of Supplier Analysis.............................................................................................7
Delivery Time Analysis......................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8

Running head: PURCHASING MANAGEMENT
Introduction
Purchasing management can be defined as the management of the purchasing process
and related functions in the organization. The organization can frame and operate the
purchasing department with the help of one or more employees in order to ensure the timely
receiving the goods, manage suppliers and controlling inventory cost to increase the
profitability of the organization (Procurement Analysis – Saving Purchasing Costs, 2017).
This report defines the important aspects, which are required to be considered by the
purchasing department of 3M Singapore Pte Ltd., a subsidiary firm of 3M Company, at the
time of making the purchase of raw materials. It includes management and selection of
suppliers, use of information and communication technology to improve the purchasing
operations and tools that can be used to analyze the purchasing cost of the company in an
appropriate manner.
Overview of the Company
3M Singapore Pte Ltd. is engaged in the marketing of abrasives, industrial tapes and
adhesives, security and safety solutions, flexible circuits, commercial graphics, RFID
solutions, homecare products, stationery products, reflective films and healthcare solutions
manufactured by 3M Company in Brunei, Singapore, Bangladesh, Nepal, and Myanmar. It
also produces sintered abrasives, electronic adhesives, and flexible circuits for its consumers
in the United States, Europe, and Asia. In addition to this, the company also facilitates
material analysis and predictive services to a number of industries and manufactures for the
film based products that are majorly used in electronic, automotive and commercial
applications.
It serves shipbuilding, oil and gas, electronics, construction, semiconductor,
automotive market, healthcare, consumer markets, and aerospace. 3M Singapore Pte Ltd. was
incorporated in 1966 and is located in Singapore. It operated as a subsidiary firm of 3M
Company (Company Overview of 3M Singapore Pte Ltd, 2018).
Supplier Selection Criteria
A cross-cultural group of representatives of the company should define supplier
selection criteria for a particular service or product. In a manufacturing company like 3M
Singapore Pte Ltd., such group of members may include representatives from production,

Running head: PURCHASING MANAGEMENT
quality, purchasing and engineering. The group members should also include personnel with
applications/technical knowledge of the services and products that are to be purchased.
Goals and Needs of organization
 The quality standards of the company should be matched with the material purchased
because poor quality components may increase the waste and time consumed by the
production line.
 The supplier should be reliable in case of pre-payment and consistency of orders. It
helps the company to become consistent in producing goods and services to fulfill the
emerging demands of the customers.
 The supplier should be able to work as per the norms and conditions of 3M Singapore
Pte. Ltd.
 The purchasing department of the organization aims at maintaining good relationships
with suppliers to get the trust of suppliers as well as the best market price to make a
purchase of raw material.
Some supplier selection criteria that are required to be considered at the time of making
any purchase can be discussed as below:
 Past performance and previous experience with the service/product to be purchased.
 The relative level of superiority of quality system which may also include mandatory
quality system registration and meeting regulatory requirements.
 Ability to meet potential and current capacity requirements and resources to manage
the delivery schedule.
 Financial Stability and market image of the supplier.
 Availability of technical support and willingness to contribute to optimizing and
developing the design and maintaining a long-term relationship (Ghoushchi, Milan, &
Rezaee, 2018).
 The total cost of dealing including communication methods, material costs,
verification cost, and inventory requirements.
 Track record of supplier related to the improvement of business performance.
 Assessment of total cost and comparing the same with the other suppliers available in
the market (Done, Liao, & Maedler, 2011).

Running head: PURCHASING MANAGEMENT
Methods to find out the potentiality of Supplier
 Obtain a Bradstreet & Dun or another financial report that are easily and publically
available.
 Requesting for a formal quotation which would include specifications of the services
and products along with the applicable prices.
 Schedule a visit to the supplier’s place by the selection or management team.
 Request for the certificate of the quality system and making confirmation about the
same either by written survey or on-site survey.
 Feedback from the other customers of that particular supplier.
 Review and analyze the industry or database sources for the supplier and product line.
 Evaluation which may include lab tests, prototyping, validation, testing or information
provided by the supplier and collect by the selection team (Inemek & Tuna, 2009).
Use of ICT in managing Purchasing Operations
Needs and Goals of the organization
The company aims to make its purchasing operations effective and efficient with the
help of introducing information and communication technology. It would also help the
organizations to keep an eye on the material in transit and manage information related to the
suppliers in an easy manner. It is required to innovate new ways to boost up the purchasing
operations and optimize the productivity (About 3M, 2018).
Information technology is also used to have a quick and immediate communication
with the suppliers in case of an emergency. Thus, the organization needs to introduce IT
techniques in each and every function of the operations management. The company also
needs to hire professional personnel to manage such operations and existing employees are
required to be trained about the new technologies (Singapore, 2017).
Recommended ICT
Computerized Shipping and Tracking
The company can reduce shipping errors and simplify the purchasing process with the
help of internet-based software and modern technologies. There are a number of software that
can enable the owners of the business to combine all the aspects of the aspects of supply
chain at a single place. The software will allow the management to organize data inventory in

Running head: PURCHASING MANAGEMENT
a digital manner, to manage tracking and shipping information and to create electronic
invoices without the use of pen and paper (3M, 2018). By using supply chain management
technologies, the company can highly reduce the time spent in receiving, shipping, compiling
and tracking the order, which can also result, into saving both money and time.
The use of information technology will help in improving the customer experience by
providing the good and services to the customers in a short time. With the help of digitalized
tracking, management can immediately identify the shipping errors made by the suppliers
(Wagner & Essig, Electronic procurement applications and their impact on supplier
relationship management, 2006).
Radio Frequency Identification
Radio Frequency Identification is a major part of the technology that can provide
numerous benefits to the organization. RFID chips are placed like labels on every stock of
goods that can help the organization to track its inventory. The use of RFID chips will help in
improving the efficiency of the supply chain by detecting the errors immediately at the time
of their occurring. It will help in increasing the control of the organizations over the goods in
transit and track them with full feasibility. These chips can also help in reducing potential
errors and operating cost as these provide computerized product management (Shaikh, Al-
Maymouni, Al-Hamed, & Dardas, 2014).
Use of social media to streamline supply chain
Social media is the fastest emerging information and communication technology of
the world having millions of users over Twitter, Facebook, and other networking websites.
3M Singapore Pte Ltd. can turn towards the use of social media to increase the visibility of
the organizational services and to attract the potential suppliers. With the help of social
media, the organization can also get all the information about its suppliers with the help of
reviews posted by other customers. Along with this, management can create more open
communication with existing and new suppliers. The customers may also be able to know
about the suppliers of the company and thus, the company can establish fair business
practices to increase the trust of customers (Ylimaula, 2013).

Running head: PURCHASING MANAGEMENT
Tools to analyze Purchasing Cost
Goals and Objectives of the organization
The management of 3M Singapore Pte Ltd. aims at minimizing the purchasing cost to
increase the overall profit of the organization. It is also concerned about the quality of
material and makes sure that there would be no any impact on quality.
Purchasing and procurement is an important part of 3M Singapore Pte Ltd. Thus, it is
required to undertake a continuous analysis of purchasing functions to ensure that the
purchasing department is making the best use of available financial resources (Colin,
Galindo, & Hernandez, 2015). As the company is involved in supplying heavy electronics
which incurs a high amount of investment, it is required to analyze each and every
specification about the purchasing of types of machinery and other important raw material as
it would directly have an impact of the investment made by customers. Some tools and
techniques can be used by the company to make purchase analysis are as follows:
Tools and Techniques
Cost Analysis
The one thing that is required to be considered by the company is the actual cost of
purchased goods. The overall cost also includes the cost of delivery, storage, and handling.
There can also be some suppliers, which may require advance payments. So if the company is
ordering large and heavy items which may require several persons to move and the
organization would have to pay them, then the actual cost would become very high in
comparison to the cost of goods only. Similarly, handling cost would also be very high in
case of overstock of goods. A full purchasing and procurement analysis would help in
identifying the total purchasing cost from an individual supplier (Wagner, Cost management
practices for supply chain management: an exploratory analysis, 2008).
Inventory Analysis
The next important aspect to analyze includes the cost of handling the goods as well
as the cost of not having the goods for manufacture and then sale. An accurate purchasing
and procurement analysis of the current inventory would facilitate the purchase manager to
predict ideal future inventory. It would also help to know about the optimum level of
inventory that would not like to influence the productivity or sales in a negative manner. This

Running head: PURCHASING MANAGEMENT
technique of handling and analyzing inventory is called Just In Time approach introduced by
Toyota (Mukopi & Iravo, 2015).
Best use of Supplier Analysis
As the company is dealing with more than one supplier worldwide, suppliers analysis
can help the purchasing department analyzing the cost of purchase in a better way. In addition
to this, by consolidating the suppliers, the organization can get better terms and best prices
that may reduce the overall purchasing cost of the company (Kepher, Shalle, & Evans, 2015).
Delivery Time Analysis
Delivery time is most important in large-scale organizations especially when the
organization is having the good image and providing services in more than one countries. A
bulk delivery that requires to be paid very quickly can play chaos with a strict cash flow.
Thus, it is required to analyze the delivery time taken by each supplier to minimize the final
delivery time for customers (Momiwand & Shahin, 2012).
Conclusion
On the basis of the above analysis, it can be concluded that the management of the
purchasing process and operations is an important aspect of the business management process
of an organization. The purchasing need and goals of the 3M Singapore Pte Ltd are described
in a brief manner on the basis of which selection criteria of suppliers have been provided so
that the management can find the link between the both. In addition to this, considering the
objective of using ICT in managing purchasing operations, some information and
communication technology practices have been recommended to the purchase management
department to increase the effectiveness of purchasing operations on the suppliers as well as
on the profitability of the company. Further, identifying the importance of purchase cost
analysis in context to the company, some tools and approaches have been described that can
be used by the purchasing department to carry out analyzing more appropriate manner. All
information contained in this report is derived from the authenticated sources like the official
website of the company and journal articles on purchasing management. This report overview
the needs and goals of purchasing department then provide recommendations according to
every need and capability.

Running head: PURCHASING MANAGEMENT
References
Procurement Analysis – Saving Purchasing Costs. (2017). Retrieved September 26, 2018,
from https://www.purchasing-procurement-center.com/procurement-analysis.html
About 3M. (2018). Retrieved September 26, 2018, from
https://www.3m.com.sg/3M/en_SG/company-sg/
Company Overview of 3M Singapore Pte Ltd. (2018). Retrieved September 26, 2018, from
https://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapid=25794262
3M, S. a. (2018). 3M Sustainability. Retrieved September 26, 2018, from
https://www.3m.com.sg/3M/en_SG/sustainability-sg/
Colin, M., Galindo, R., & Hernandez, O. (2015). Information and Communication
Technology as a Key Strategy for Efficient Supply Chain Management in
Manufacturing SMEs. Procedia Computer Science, 55, 833-842.
Done, A., Liao, C., & Maedler, M. (2011). technology in Purchasing: Impacts on
Performance and Future Confidence. Retrieved September 26, 2018, from
https://pdfs.semanticscholar.org/8e08/b81099d44e052954c540db3dd5c981d6ccf9.pdf
Ghoushchi, S. J., Milan, M. D., & Rezaee, M. J. (2018). Evaluation and selection of
sustainable suppliers in the supply chain using new GP-DEA model with imprecise
data. Journal of Industrial Engineering International, 14(3), 613-625.
Inemek, A., & Tuna, O. (2009). Global supplier selection strategies and implications for
supplier performance: Turkish suppliers’ perception. International Journal of
Logistics Research and Applications, 12(5), 381-406.
Kepher, A. B., Shalle, I. N., & Evans, O. (2015). Role of Supplier Management on
Procurement Performance in Manufacturing Sector in Kenya: A Case of East African
Breweries, Kenya. International Journal of Social Science and Humanities Research,
3(4), 540-555.
Momiwand, A., & Shahin, A. (2012). Lead Time Improvement by Supplier Relationship
Management with a Case Study in Pompaj Company. World Applied Sciences

Running head: PURCHASING MANAGEMENT
Journal, 16(5), 759-768.
Mukopi, C. M., & Iravo, A. M. (2015). An Analysis of the Effects of Inventory Management
on the Performance of the Procurement Function of Sugar Manufacturing Companies
in the Western Kenya Sugar Belt. International Journal of Scientific and Research
Publications, 5(5), 1-14.
Shaikh, A., Al-Maymouni, R. K., Al-Hamed, L. H., & Dardas, A. (2014). The Role of RFID
in Supply Chain Management Macro Processes. International Journal of Innovation,
Management, and Technology, 5(5), 388-393.
Singapore, E. (2017). Why commercialization is at the heart of 3M Singapore's strategy.
Retrieved September 26, 2018, from
https://www.edb.gov.sg/en/news-and-resources/insights/manufacturing/why-
commercialisation-is-at-the-heart-of-3m-singapore-s-strategy.html
Wagner, S. M. (2008). Cost management practices for supply chain management: an
exploratory analysis. International Journal of Services and Operations Management,
4(3), 296-320.
Wagner, S. M., & Essig, M. (2006). Electronic procurement applications and their impact on
supplier relationship management. International Journal of Services Technology and
Management, 7(5/6), 439-462.
Ylimaula, K.-A. (2013). EXPLORING THE POTENTIAL OF SOCIAL MEDIA IN
SUPPLIER RELATIONSHIP MANAGEMENT. Retrieved September 26, 2018, from
https://www.impgroup.org/uploads/papers/8012.pdf