Purchasing Management: Supplier Selection, Cost Analysis, and ICT Use

Running head: PURCHASING MANAGEMENT 1
Purchasing management
Institution
Student name
Date

Purchasing management 2
Executive summary
This article is designed to deliver the report on the three main areas of purchasing
management, that is; supplier selection criteria, purchasing cost and the use of information and
communication technology in purchases and purchasing management. The report herein is
prepared at the capacity of the purchasing manager in one of Nestle branches.
The method of data and information collection used in this report focuses on Nestle, a
global company with a good foundation and representation in Singapore, a company dedicated to
the provision of beverages with the likes of MILO, NESTUM, and OMEGA. The information
and the data collected on the subject from the organization are assumed to be universal and apply
in all other organizations limiting the information collected on the topic.

Purchasing management 3
Table of Contents
Introduction.................................................................................................................................................4
Nestle background information...................................................................................................................4
Product....................................................................................................................................................4
Suppliers..................................................................................................................................................5
Nestle competitors..................................................................................................................................5
Nestle goals and strategies......................................................................................................................5
Supplier selection criteria, issues, and recommendation............................................................................5
Single supplier.........................................................................................................................................6
Multiple suppliers....................................................................................................................................6
Local supplies..........................................................................................................................................6
Overseas supply.......................................................................................................................................7
Recommendation selection of the supplier.................................................................................................7
ICT for purchasing operations and recommendations.................................................................................7
Supplier purchaser portal........................................................................................................................8
Peter Kraljic.................................................................................................................................................9
Leverage items........................................................................................................................................9
Strategy to reduce purchases risk............................................................................................................9
Bottleneck items....................................................................................................................................10
Strategic items.......................................................................................................................................10
Non-critical items..................................................................................................................................10
Recommendation on how to reduce the cost for water............................................................................10
Recommendations on the use of ICT.........................................................................................................11
Purchasing cost analysis............................................................................................................................11
The total cost of the product.....................................................................................................................12
Recommendation purchases cost analysis................................................................................................12
Conclusion.................................................................................................................................................13

Purchasing management 4
Recommendation on the report................................................................................................................13
References.................................................................................................................................................14
Introduction
The objective of preparing this report as the purchasing manager is to highlight and
explain the main activities that are handled in the process of making purchases. The explanation
of the report shows that the factor affecting purchases revolve the available communication and
information technology, the actual cost of purchasing the product, and the criteria the
management used to select the supplier. The criteria for choosing the supplier arise from the
dilemma of choosing between single or multiple suppliers and whether to make the purchases
locally or overseas. The report also details the contribution of technology, especially in
communication and information in business as far as making purchases is concerned.
Nestle background information
Product
The establishment of the business was driven by the motivation and the objective of
making a profit just like any other business from the provision of products like MILO,
NESCAFE, NESTUM, and OMEGA. Collectively, the products are beverages meant to improve
the build a healthier community in Singapore (Monczka, Handfield, Giunipero, & Patterson,
2015).