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ICT Supplier Selection Criteria

   

Added on  2020-03-23

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Running head: PURCHASING OPERATIONS AND MANAGEMENTPurchasing Operations and ManagementStudents’ NameAffiliate Institution
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PURCHASING OPERATIONS AND MANAGEMENT 2IntroductionThe retail market is very competitive and dynamic and requires quite a lot of businessmuscle to stay afloat. Many retail giants are on the brink of collapse; case in point is theNakumatt supermarkets that were once a household name in the Kenyan and East African marketat large. Empty shelves are now a typical picture associated with this once giant retailer in theregion. This essay will focus on the aspects to increase efficiency of doing retail business. Thethree main issues to be discussed will include supplier selection criteria, ICT for purchasingoperations and purchasing cost analysis. Recommendations will be made on the best practicessurrounding these three issues. This essay will focus on another giant retailer; Walmartsupermarkets that are a household name in America and a global brand in some respect. Walmartstores deal in a variety of products including household goods for example utensils, furniture,electrical appliances and fresh food and fruits. Almost all kind of goods will be available in thesestores. Walmart is a global brand and hence its business implications are felt in the globaleconomy (Gereffi, 2009). The market is distributed from the Americas to Asia (South Korea andJapan) and across Europe (Germany). Competitors in the market include KMart Super Centre,Supervalu Inc, Croger among many more. Many of the competitors are also targeting the globalmarket. Most of the goals and strategies of Walmart are focused on sustainable profitability.These strategies are aimed at maximizing profitability but at the same time factor in social andenvironmental responsibilities (Cohen, 2017).Supplier Selection Criteria
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PURCHASING OPERATIONS AND MANAGEMENT 3Supplier selection and monitoring of their performance is key to efficient businessoperation. Devising the best supplier selection method and evaluating the performance of thesupplier goes a long way to ensure benefits of the goods purchased are felt later in the chain ascost effectiveness, quality, dynamicity and creativity (Nair, 2015). Being a retail entity, Walmartseeks to maximize profit on their varied products while maintaining a low cost on their productscompared to its peers in the market. Maintaining competitive prices for its products will help ithave an edge on the customer base and hence boosting the sales. There has to be anunderstanding between the supplier and the client to purchase products at the cheapest and mostfavorable prices ever. This will enable the client to develop a competitive price structure in themarket. In his study, Sen postulates that decisions to be made on coming up with the ideal supplierare very challenging and include inadequate information, imperfect choices and more qualitativemethods applied (Sen, 2008). Over the last 30 years, a lot of academic research has beenundertaken to devise a consistent approach in choosing an ideal supplier. Data mining methods,problem establishment methods, multi-criteria decision aid and mathematical programming aresome of the methods to be applied in supplier selection discussed by Sen. The following phasesare consistent with most supplier selection strategy (Sen, 2008):Defining the problemEstablishing a methodAssessing suitability of qualified suppliersChoosing the most preferred supplier
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PURCHASING OPERATIONS AND MANAGEMENT 4Measuring endurance of a supplier in most cases is dependent on quality of the products,price, service and delivery. From an analysis of the literature by academicians in this field,qualitative and quantitative supplier selection framework will be preferred here. In thismethod, two algorithms are applied to select the supplier. As discussed in detail by Sen, thefollowing pointers are key according to Sen (2008);Establishment of a cross-functional group. This is because the supplier selection affectsmany other activities and decision makers in the team. It includes production strategyteams, cash flow controllers, and inventory managers, among others. Therefore aconsensus should be sought.Data mining to come up with varied supplier selection methods. This will help to comeup with new and more efficient strategies.Arrange the selection methods into a preferred flowCalculation of percentage and relative importance degrees for the main and subclassesImportance is then sought for buyer-supplier integration stepsThe first algorithm is applied to establish total rating of transformation to higherintegration levelThe buyer-supplier integration is then calculated using the second algorithmThese listed steps can be practically applied to search for an ideal supplier among competingsupplier candidates. The level of integration is key in this method to establish both qualitativeand quantitative selection of ideal suppliers. Qualitative and quantitative attributes to be selectedon include reliability, technology, cost effectiveness, high quality, and quality service amongothers. This method has been shown to work in the retail market and recommendation is herebymade to apply it in the Walmart case to gauge its feasibility and tolerance (Sen, 2008).
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