Contracts and Procurement Discussion: Risk and Best Practices

This discussion post examines the complexities of contract and procurement management, particularly within a global context. The student addresses the risks inherent in long supply chains, such as bottlenecks and lead times, and the challenges of balancing product diversity with supplier globalization. The post explores the best ways to respond to market demand fluctuations, emphasizing the importance of real-time analysis of production capacity. It identifies common supply chain disruptions and reasons for poor operations, including communication issues and blurred organizational boundaries. The post also analyzes the Wembley Stadium project, highlighting procurement challenges and failures due to poor leadership and conflicting interests. The student then proposes the adoption of a global supply chain model and adjustments to contract regulations to mitigate these issues. The discussion concludes with a response to a classmate's post, further elaborating on inventory constraints and additional reasons for poor supply chain performance.

Contract and Procurement Discussion 1
Procurement Discussion
Student’s Name
Institution
Date

Contract and Procurement Discussion 2
Question 1
First, it is important to note that long supply chains are always accompanied by risks such
as bottlenecks, long lead times, and expensive emergency measures to ensure stable supply.
Today's business environment creates many challenges, one of which is how to balance the
growth of product diversity with the globalization of suppliers. Due to inventory constraints, the
factory cannot store all the necessary parts in the warehouse, which means that the production
line risks the shortage of parts caused by the globalization of procurement (Christopher 2010).
The question now is: "What is the best way to respond to demand fluctuations due to market
changes?" Therefore, the key to solving the problem is to understand in real time which jobs
should be produced by the existing parts of the plant in order to make the most efficient use of
the available capacity. The most common causes of supply chain disruptions are out-of-stock,
excess inventory, new product failures, increased product price reductions, and excessive time
spent on engineering and development. Reasons for poor supply chain operations include poor
communication, potential functional silos, short-sightedness, lack of resources, and blurred
organizational boundaries. Mixed factors such as fluctuations in raw material and logistics costs,
increased supply chain security and quality control requirements, and drastic changes in demand
patterns have increased the complexity of global supply chain management. As globalization and
interoperability continue to increase, the complexity of the supply chain and the risk of shocks
and disruptions have increased. To effectively address these challenges requires a strong risk
monitoring and mitigation process (Giannakis & Croom 2004).
Question 2
In order to effectively address the challenges identified above, there is need to adopt a
global model of supply chain. There is also need to adjust the regulations governing the contract

Contract and Procurement Discussion 3
so that once the contractor sign any given contract at any part of the world, he or she is indebted
to the rules and agreements signed with the client. . Supply chain management is an overall
strategic task that can only be achieved through the cooperation of various departments.
Question 3
Yes, Wembley Stadium was faced with procurement challenges such as poor
communication, potential functional silos, short-sightedness, lack of resources, and blurred
organizational boundaries. Generally, Wembley Stadium failed due to poor project and
procurement leadership, lack of proper time management and conflicting interests among
stakeholders so that there was no cooperation among the involved parties (Christopher 2010).
Question 4
The procurement management approach utilized in Wembley Stadium project lacked
many elements of a good global procurement model. It was characterized by to poor project and
procurement leadership, lack of proper time management and conflicting interests among
stakeholders so that there was no cooperation among the involved parties. That is why it resulted
in a lot of losses.

Contract and Procurement Discussion 4
References
Christopher M. (2010). Logistics and Supply Chain Management: Strategies for Reducing Risks
and Improving Services. 4th edn. London: Pearson Education
Giannakis M. & Croom S. R. (2004). Toward the development of a supply chain management
paradigm: a conceptual framework. J Supply Chain Manag. 40:27–37.
Reply to Rume Afe
Hello Afe, I have gone through your post and I must admit that you did a great job to analyze the
procurement at Wembley Stadium project. It is true as you established that the procurement
management approach adopted was characterized by poor project and procurement leadership,
lack of proper time management and conflicting interests among stakeholders so that there was
no cooperation among the involved parties. Just to complement on your ideas, I want to add that
due to inventory constraints, the factory cannot store all the necessary parts in the warehouse,
which means that the production line risks the shortage of parts caused by the globalization of
procurement. The question now is: "What is the best way to respond to demand fluctuations due
to market changes?" Factory inventory will result in high storage costs, emergency measures will
be too high logistics costs, and short-term mass production will Increase operating costs.
Therefore, the key to solving the problem is to understand in real time which jobs should be
produced by the existing parts of the plant in order to make the most efficient use of the available
capacity. I also want to add that other reasons for poor supply chain operations include poor
communication, potential functional silos, short-sightedness, lack of resources, and blurred

Contract and Procurement Discussion 5
organizational boundaries.