Purchasing Management: Supplier Selection, Cost Analysis, and ICT

Running head: PURCHASING MANGEMENT
PURCHASING MANAGEMENT
Name of Student
Name of the University
Author Note

PURCHASING MANAGEMENT1
Table of Contents
Introduction......................................................................................................................................3
Supplier selection criteria and issues related to the same................................................................4
2.0 Supplier selection and evaluation..........................................................................................4
2.1 Single VS. Multiple sourcing................................................................................................7
2.2 Peter Kraljic model of Risk-value.........................................................................................8
2.3 Cost-ratio and linear averaging method.................................................................................9
3. Purchasing cost analysis............................................................................................................10
4. ICT for purchasing operations...................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

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Introduction
Supermarkets retailers are the shops offering self-service to its customers for products
ranging from food, beverages, and many other products. For the purpose of this study the
supermarket selected is NTUC Fairprice of Singapore. This supermarket has its headquarters in
Singapore and its product range includes- bakery, clothing’s, alcoholic beverages, dairy, frozen
foods, meat and poultry, general merchandise and others. The Fairprice supermarket belongs to
the retail industry. It is the largest super market chain of Singapore. It has got more than 50
outlets and about 100 supermarkets across the country. The company’s slogan shows their desire
to become the personal brand of the Singapore citizens as it wishes to become the very own
brand of Singapore. The individual outlets of this supermarket includes- fairPrice express, fair
price finest, warehouse club and others. The company’s aims and goals can be understood from
their vision and mission statement. The company’s vision is to become global retailer and not
just limited to Singapore and with the presence of a heart. The company understands its
responsibility towards the society, the customers and the community at large as it can be
understood from its mission statement. The supermarkets missions is to become the most
preferred employers by the employees and others, its objective is to provide the best quality
goods such that the customers feel that they are getting value for their products. Its objective is
also to provide best services and meet the requirements of different stakeholders of the company
such as- members, community and others. The company’s competitors include Giant Sinagpore,
Cold Storage supermarket and Sheng Siong. The main purpose if the study is to understand the
production management concept relation to the chosen organization or supermarket. This paper

PURCHASING MANAGEMENT3
will highlight the concepts of supplier selection criteria, ICT recommendation for the company
and the purchasing cost analysis.
Supplier selection criteria and issues related to the same
2.0 Supplier selection and evaluation
The companies goals of purchasing is included in the CSR strategy where it is clearly
mentioned they are focused on responsibly selling and buying1. Since the company wishes to
provide best quality goods to the customers so they conduct regular meeting with their suppliers
and have entered into different agreements with them such that they can procure the best quality
goods from the selected suppliers2. The company has implemented a new purchasing policy for
the purpose of helping the procurement of resources from the sources that are sustainable. The
main purpose of the purchasing team at the super market is to ensure that proper relationships is
maintained with the suppliers to ensure high quality of the goods. The purchasing department has
the objective of working with the suppliers such that house products can be improved and made
healthier through the material provided by the company3.
The supplier selection method will include linear averaging method to select the most
appropriate supplier4.
1 Luthra, Sunil, Kannan Govindan, Devika Kannan, Sachin Kumar Mangla, and Chandra Prakash Garg. "An
integrated framework for sustainable supplier selection and evaluation in supply chains." Journal of Cleaner
Production 140 (2017
2 Sharma, Sanjay. "Procurement Cost." In Inventory Parameters, pp. 111-130. Springer, Singapore, 2017.
3Govindan, Kannan, Sivakumar Rajendran, Joseph Sarkis, and Parasurama Murugesan. "Multi criteria decision
making approaches for green supplier evaluation and selection: a literature review." Journal of Cleaner Production
98 (2015): 66-83.
4 Galankashi, Masoud Rahiminezhad, Ali Chegeni, Amin Soleimanynanadegany, Ashkan Memari, Ali Anjomshoae,
Syed Ahmad Helmi, and Ahmad Dargi. "Prioritizing green supplier selection criteria using fuzzy analytical network
process." Procedia CIRP 26 (2015): 689-694.