Purchasing Management Practices for Sheng Siong
Added on 2020-04-07
15 Pages2926 Words1258 Views
Running head: SHENG SIONG PURCHASING MANAGEMENT1Sheng Siong purchasing managementName:Institution:
SHENG SIONG PURCHASING MANAGEMENT2IntroductionSheng Siong group is one of the largest retailers in Singapore with 37 grocery stores across the island. The chain stores provide ranges of the fresh and chilled produce including meat, seafood, and vegetables to processed, frozen, packaged and preserved producers. Additionally, the supermarket offers general merchandise such ashousehold and toiletries products[ CITATION Hoo13 \l 1033 ]. For the past seven years, the company has been developing house brands to give its users best alternative to national brands at affordable price. On March 2013, the company got HACCP certification for processing of seafood, vegetables, and fish; from receiving of the raw materials, storage, processing, packing and packaging of the products. Similarly, there is HACCP certification in the repackaging of the frozen food, dried food, and fruit[ CITATION YIh12 \l 1033 ]. Established in 1985 and being listed in the August 2011, reputation and long history for excellent and quality product at competitive prices has led to Sheng Siong to become the best-established brand name in Singapore.Companies such as Tesco and NTUC fair price are the main competitors of the Sheng Siong. The Sheng Siong can get supplies locally, but the company focuses on the neighboring countries around Asian countries and direct suppliers in China. They can control the time delivery and higher price due to the elimination of the middlemen. Sheng Siong’s construction and expansion of the new storage in the Mandai link will establish a centralized distribution to increase their sustainability and scope.Sheng Siong supermarket has commenced using secure cash–management system from the glory global solution-UK[ CITATION Ade16 \l 1033 ]. It comes as result ofsolving the workforce difficulties, and it is in use across all the sheng stores in Singapore. The system reduces the time it takes to do cash reconciliation tasks[ CITATION Sch13 \l 1033 ]. Additionally, it improves security and systems, accept, authenticate and dispense cash for the users. As the CEO Lim Hock of Sheng says thatthe group is the first company to implement self-payment kiosk in Singapore[ CITATION Cao11 \l 1033 ].
SHENG SIONG PURCHASING MANAGEMENT3Just in time philosophy requires that the item should be produced when user whether external or internal are waiting for them. The just in time is an example of the chase demand strategy for the supply and demand balancing. One of the characteristicsof the JIT is the maintaining of the close relationship with the suppliers, high-quality machines to avoid delays with regular stockings[ CITATION Mon15 \l 1033 ]. For the buyer to plan and demonstrate proper supply management there should be smaller and frequent deliveries.Sheng Siong process of selecting suppliersIdentifying the supplierSheng Siong imports some of the items from the other countries such as China at a lower price. The company runs the background checks and orders the capacity audits. Also, it tries to get the customer references and calls them to make sure the factory meets Singapore market regulatory standards. The company avoids large manufacturers if they are ordering small since they will quote higher prices.Clear define the expected itemThe Sheng Siong writes the product specification that leaves no interpretation to the suppliers. Before the company pays for the goods, the Sheng Siong reaches to a writtenagreement with vendors.Negotiate reasonable payment termsThe Sheng Siong uses the bank transfer method for the payment method. 30% deposit caters for the goods purchased while 70% is paid after the supplier’s faxes the bill of lading to the Sheng Siong [ CITATION Wil13 \l 1033 ].Controlling the product quality in the factoryThe Sheng Siong ensures the vendors met the products specification by monitoring the process. The quality control happens by random inspection of valid sample statistically. Therefore, professional examinations enable quick conclusion about the entire batch of production.
SHENG SIONG PURCHASING MANAGEMENT4Formalizing the previous stepsSheng Siong reduces the supplier's risk by buying the item to an OEM agreement. The contract gives a greater leverage and reduces the risk of difficulties in case the problem occurs[ CITATION Wil13 \l 1033 ].Appropriate evaluation tools for suppliersHitches associated with vendor evaluation can be eradicated by using proper tools. So the recommended assessment instruments for the Sheng Siong are the carter 10Cs model approach. The approach is critical before contracting on the ongoing supplier performance. The Cs includes;Capacity: it assess the capability of the company’s ability to deliver the orderConsistency: deals with the coherence of the organization output.Competency: skills of the process, peoples, and company)Cost: offering of the items at an affordable and competitive priceCash: emphasizes on the company’s financials aspectCommitment to the product quality: the ability of the firm to control monitors and manage the qualityControl of the process: does the business offers flexibility and control its process.Clean: deals with the legitimacy of the organization, group practicing ethics and ensure supplier does not engage in the child labor.Communication efficiency: the company should make sure the provider supports the information and technology integration to coordinate and collaborate with the supply chain management.Cultures are the buyer and supplier share the same culture.
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