Supply Chain Management: A4 Paper Procurement Report Analysis

This report provides a detailed analysis of the roles and responsibilities in the procurement and supply of A4 size paper, examining various organizational procedures and policies. It delves into ethical codes, corporate governance rules, negotiation and quotation processes with suppliers, and the application of terms such as incoterms, bar coding, invoicing, and purchase requisitions. The report further explores market dynamics, marketing systems, and the impact of analytical tools like PESTEL and Porter's Five Forces. It addresses macroeconomic factors, corporate social responsibility, and cost breakdowns, while also highlighting the benefits of effective supply and procurement. The report covers inventory management, sourcing essentials, supplier appraisal, negotiation strategies, and contract terms, providing a comprehensive overview of the supply chain management process for A4 paper procurement.

Printing and Paper stationery in supply chain
management
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Executive summary
In this assignment the roles and responsibility for the supply and procurement of A4 size paper
has been evaluated in details. Different procedures and policies of organizations involved in the
procurement of A4 paper have been studied. The ethical codes of procurement and the rules of
corporate governance have been examined. The process of negotiation and quotation procedures
from supplier has also been studied. Different terms such as incoterm, bar coding, invoicing, and
purchase requisitions have also been studied in details.
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Table of Contents
Executive summary.........................................................................................................................0
Determining value by procurement and supply...............................................................................3
Introduction..................................................................................................................................3
Roles and responsibility for the supply and procurement........................................................3
Breakdown of budget and cost for supply and procurement of goods and services................3
Priorities of the external and internal consumers for the purchase and supply........................3
Dealing with the dispute’s or conflicts with the stakeholders and promoting commitment....3
Different organizations who are involved in supply chain and the significance in the supply
chain management....................................................................................................................4
Monitoring and controlling the purchased services and goods................................................4
Advise to the employee and colleagues of the organization relating to use of documents in
supply and procurement...........................................................................................................4
The requirement of approval of orders, requisitions, and invoices..........................................4
Ethical codes and rules of corporate governance in supply and procurement.........................5
Use of financial budget in supply and procurement of goods..................................................5
Expenditure management with suppliers.........................................................................................5
Introductions................................................................................................................................5
Different kinds of market.........................................................................................................5
Different kinds of marketing systems......................................................................................5
Understanding the impact of different analytical tools............................................................6
Impact of factors of macro-economic......................................................................................8
Effect of corporate social responsibility (CSR).......................................................................8
Breakdown of cost of services, goods and construction..........................................................8
Benefits of effective supply and procurement..........................................................................8
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Application of portfolio analysis..............................................................................................9
Pricing arrangement.................................................................................................................9
Breakdown of direct and indirect cost......................................................................................9
Comparison of new prices with the historical prices of goods.................................................9
Link between price, markup, cost, and margins.......................................................................9
Negotiating with the suppliers and analyzing the cost of services or goods purchased...........9
Defective quality and non-performance cost..........................................................................10
Assessment of different kinds of inventories, inventory techniques, and cost of inventory
holding....................................................................................................................................10
Application of bar coding and forecasting technique of inventories......................................10
Kinds of incoterms.................................................................................................................10
Developing agreement in supply and procurement.......................................................................11
Introduction................................................................................................................................11
Contract terms used in goods and services.............................................................................11
Review of procedures and process to ensure compliance with legal requirements...............11
Core clauses use at the time of procurement..........................................................................11
Performance assessment based on SMART...........................................................................12
Sourcing Essentials in Supply and procurement...........................................................................12
Introduction................................................................................................................................12
Identifying requirements from stakeholders...........................................................................12
Effect of procedures on sourcing process...............................................................................12
Single, dual or multiple sourcing options...............................................................................13
Developing invitations to tender............................................................................................13
Participation of stakeholders in sourcing plans......................................................................13
Evaluating quotations and tenders..........................................................................................13
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Purchase to Pay (P2P) systems...............................................................................................14
E-tendering software..............................................................................................................14
E-auctions...............................................................................................................................14
Unit: Supplier Appraisal.........................................................................................................15
Evaluation of capabilities of potential suppliers....................................................................15
Effective negotiation......................................................................................................................16
Introduction................................................................................................................................16
Handling disputes while negotiation with suppliers and stakeholders...................................16
Stages of negotiation..............................................................................................................16
Sources- Negotiation power...................................................................................................16
Negotiation- behavioral aspects.............................................................................................17
References......................................................................................................................................18
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Determining value by procurement and supply
Introduction
In this module, the different roles and functions for the supply and procurement in organizations
have been analyzed in details. The priorities of the external and internal customers for the supply
and procurement have also been evaluated. The benefits of the triple bottom line by purchasing
the services and goods have also been studied.
Roles and responsibility for the supply and procurement
To achieve the business goals and long term objectives paper industry should focus on their core
areas such as procurement of goods, manufacturing, management of inventory, manufacturing of
goods, and logistics. For the procurement of A4 size paper, organization should ask quotations
from all the suppliers and then choose the best suppliers and after selecting the best suppliers’
organization should negotiate and then place orders for the supply of goods
Breakdown of budget and cost for supply and procurement of goods and services
It is essential to separate the two kinds of procurement as the law relating to the sales of good
and sales of services are different. The categories of the expenditures are different for both the
procurement of services and goods. For purchasing the A4 paper, management has to consider
the materiality of the items and for rendering the services the benefits which will arise from the
services are examined by the management.
Priorities of the external and internal consumers for the purchase and supply
It is important to identify the external and internal customers of the A4 paper company. The
functional groups of the organization who receive the output are known as internal customers.
The internal customer of the A4 paper organizations are the owners, employees and the
representative of the organizations and the external customers are the suppliers, society,
government, shareholders, customers and the creditors of the organization.
Dealing with the dispute’s or conflicts with the stakeholders and promoting commitment
The A4 paper company should first identify and recognize its stakeholders of the business. These
stakeholders can influence the profit of organizations. The organizations should deal effectively
with all the stakeholders whether internal or external stakeholders. The company should then
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identify the problems and their influence on the organization. Organization should design so as
to find the influence of stakeholder and after that implement the design and monitor the
stakeholder’s relationship.
Different organizations who are involved in supply chain and the significance in the supply chain
management
Supply chain management helps to boost the service of customers. There are many expectations
of customers and they can be fulfilled if the supply chain of the organization is managed
effectively. The customers expect that the products will be delivered at the right time and
location and at a reasonable price and they also expect after sale service from the organizations.
Monitoring and controlling the purchased services and goods
An A4 paper organization should organize a governing council for the management of supply
who will develop the strategy of effective management of supply chain. The organization should
also take social responsibility to attain the objective of business. The organizations should
establish different mechanism to minimize and control the risk of supply chain.
Procedures related to supply and procurement
Advise to the employee and colleagues of the organization relating to use of documents in supply
and procurement
The purchase requisition is needed when a purchasing staff places an order to the supplier on
behalf of the company. According to Handfield et al. (2015 pp.3), purchase requisition is used to
inform the purchasing department to start the process of procurement. Another document is
purchase orders which bind the supplies and the buyers legally. The purchase orders include
important information relating to the size of the orders, terms of payment and other data. The
next document in the supply and procurement is delivery notes. A delivery note is a document
the descriptions of the goods and also it includes the number of products or goods.
The requirement of approval of orders, requisitions, and invoices
Requisition approval is required to procure the material of A4 paper on behalf of the
organization. The first step of the approval of requisition is to identify the needs of the purchase
and scope of the stakeholders. The process of order approval is required to identify whether the
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order for procurement has been accepted or rejected. The process of invoices approval is
required to identify whether there exist any problem in the invoice.
Ethical codes and rules of corporate governance in supply and procurement
A4 paper organization should follow the code of ethics while procuring the goods. The
procurement department should deal with the suppliers in an unbiased and fair manner. If the
organizations fail to follow the code of ethics at the procurement then it can affect the brand
image or goodwill of the organizations.
Use of financial budget in supply and procurement of goods
The financial budget plays an important role in the procurement of A4 paper and its supplies.
The financial assist the organizations in saving of cost and avoiding unnecessary expenses
relating to the procurement. The financial budget helps to establish the responsibilities between
the procurement departments.
Expenditure management with suppliers
Introductions
In this module, the different kind of markets which is served to the customers, suppliers by the
organizations is being analyzed. The effect on organizations by the changes in the market has
also been examined.
Effect of external environment on supply and procurement
Different kinds of market
There are two types of A4 paper market which are served to the consumers and suppliers of an
organization such as consumers market and industrial market. In industrial market, there are very
buyers and also the products are customized. In consumer market, there are many buyers who
purchase the goods at the listed price.
Different kinds of marketing systems
There are different kinds of marketing system of A4 paper such as perfect competition, duopoly,
imperfect competitions, monopoly, and oligopoly. There are huge numbers of sellers and buyers
in perfect competition. In case of monopoly, there is no competitor and there is only seller of
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goods or raw materials. Oligopoly competition is also same as monopoly competition and only
difference is that in oligopoly there are too many buyers of goods
Understanding the impact of different analytical tools
There are different types of tools b the business in supply chains to analyze the effect of external
environment. Tools such as pest analysis and porters’ five forces models help the organizations
to identify the external effect on organizations.
PESTEL analysis helps the business to identify the business opportunities available in the market
and also evaluate the external threat from the market. There are five factors in PESTEL analysis
as discussed below:
Political factors- the organization should identify the government influences on paper industry.
The organization should identify the political influences, tax policy, government policy, labor
law, and restrictions on trade
Economic factors-the organization who are manufacturing or purchasing A4 paper should
consider the economic factors at the time of manufacturing or procurement such as inflation
rates, exchange rates, unemployment rates, economic growth.
Social factors- the organization who is procuring or manufacturing the A4 paper should consider
the social factors while doing business such as age distribution, health consciousness, income
distribution etc.
Technological factors- organization should always keep their technology update or modified to
compete with in the paper industry
Environmental factors- the A4 size paper manufacturing company should consider and identify
the environmental factors to achieve its objective. These factors include environmental and
ecological aspects such change in climate and weathers.
Legal factors- the organization have to comply with relevant laws such as laws of consumer
protection, safety laws etc. for smooth running its paper business.
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Figure1. PESTEL analysis (sources: self-learner)
The porter five forces model- this model discuss about the factors which can affect the paper
industry such as:
Buyer threats- organization should identify the threats from buyer in the paper industry as buyer
can also influence on the paper industry
Supplier threat- Company should identify their suppliers’ potential to influence the paper
industry.
New entrant threats- company should identify the threats of new entrants into the paper
industry as new entrants can affect the market.
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PESTEL Economic
al
Social
Technolo
gical
Political
Legal
Environme
ntal

Substitute threat- Company should identify all the threats which can be cause from substitute
product as it can substitute the A4 size paper if the company sells any better product than A4 size
at a lower price.
Figure2. Porter five forces Model (source: self-learner)
Impact of factors of macro-economic
According to Ismail et al. (2015 pp. 151), there are different macroeconomic factors which can
influence and availability of the A4products of the organization. Factors such as changes in the
interest rate, fluctuation in the exchange market, inflation, changes in the monetary policy, etc.
can affect the availability and prices of the product. These changes can increase the cost of
materials used for manufacturing the goods and can also increase the logistics cost and transport
cost.
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Porter's
Five
Forces
New
Entrant
threats
Substitute
Threat
Buyers
bargaining
power
Suppliers
bargaining
power
Threats
from rival

Effect of corporate social responsibility (CSR)
A4 paper business should contribute a certain percentage of its turnover in CSR. It is also the
social responsibility of the organizations to treats its various stakeholders properly. If the
business contributes towards social responsibility then it can achieve its long term goals and
objectives because society helps the business to flourish in the industry and also to run its
business effectively and efficiently.
Effective purchasing
Breakdown of cost of services, goods and construction
It is necessary to breakdown the cost related to goods, construction and, construction because
there different types of indirect and, direct cost included in the procurement cost. The costs of
goods are the costs which are related to material and tangible items. The services cost is the cost
which are related to the organizations or individual performance and the constructions cost
include maintenance and repairs cost and are also project-based cost.
Benefits of effective supply and procurement
The advantages of effective supply and procurement are that it reduces the cost of buying and
enhance internal effectiveness. Effective supply and procurement helps the organization to cover
the supplier risk and also assist to help in the operations of inbound and outbound logistics.
Application of portfolio analysis
According to Trautrims et al. (2017 pp.228), the portfolio analysis in supply chain of A4 paper
evaluates the historic and future expenditure on the supply and procurement of goods and
services. It also analyses the risk associated with the purchasing of goods and services. The last
step in the portfolio analysis to develop a strategy to effective procures the goods and services
from the supplier. It also helps the organization to design a procurement profile for the purchase
of goods and services from the best suppliers.
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