Marks and Spencer: Global Sourcing Methods and Procurement Excellence

This report undertakes a comprehensive analysis of Marks and Spencer's (M&S) global sourcing and procurement strategies. It begins by critically examining various global sourcing methods employed by the company, such as preliminary research, market and supplier evaluation, supplier selection, implementation, and performance monitoring. The report emphasizes M&S's focus on global procurement to reduce operational costs and highlights specific examples, like sourcing cotton from countries with low labor costs. Furthermore, the report proposes a global procurement strategy that can lead to procurement excellence and improve M&S's competitive advantage, considering factors like BS 8903 for sustainable procurement and the impact of Brexit. The analysis includes the risks associated with global sourcing, such as language barriers and compliance issues. The report concludes by emphasizing the importance of adapting to the dynamic market environment and maintaining strong supplier relationships to achieve long-term success in the global marketplace.

PROCUREMENT
MANAGEMENT

EXECUTIVE SUMMARY
Procurement management refers to a strategic practice that is used by an organization to
optimally utilize the organizational spend. This helps in managing the operations of company so
that tasks are attained on time frame. This report undertakes Marks and Spenser that is a leading
global company in world. This report helps in examine the global sourcing methods that help
business enterprise to attain targets. Further it includes global procurement strategy that supports
in gaining competitive advantage within market.

Table of Contents
EXECUTIVE SUMMARY.........................................................................................................................2
INTRODUCTION.......................................................................................................................................4
MAIN BODY..............................................................................................................................................4
Critically examine global sourcing methods............................................................................................4
Global procurement strategies that leads to procurement excellence and improve the Competitive
advantage of an organization...................................................................................................................8
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
Procurement management defines that process of acquiring all items and services
properly so that process and projects are done effectively and efficiently. Global sourcing defines
as a procurement strategy that is adopted by an organization for sourcing goods and services
globally to get the efficient results in future perspective. It refers to acquiring products and
services of the organization from preferred suppliers within the budget set by a business
enterprise (Rane, Narvel and Bhandarkar, 2019) . The main aim of global sourcing is to
lowering the cost along with maintaining the quality of products. This report is based on Marks
and Spencer that is a leading company who deals on clothing, food, financial services, home
wares etc. The company operates on global level and works highly on using procurement
strategies to get efficient and effective outcomes within global business industry. This report
explain critically examine global sourcing methods which are used by an organization including
procurement strategy that leads excellence and improve the organization competitive advantage
within market place.
MAIN BODY
Critically examine global sourcing methods
Global sourcing is a process of producing products and services in an economic manner and
something’s to achieve this target organization need to search for domestic and foreign
manufacturer to produce a products (Jnr, 2019). It is one of the best practice that is used by an
organization where they find the best cost effective location for manufacturing for one or more
than one of the products that an organization sales to its customer on global level . For instance-
if a cloth manufacturing company finds that their products are manufactured in cost effective
manner within foreign country because of getting low wage labor than firm continues it’s
production in that country. Due to this cost of products are minimum that helps in attracting
number of people and gaining competitive advantage within competitive marketplace. For
example- company like Mark and Spencer buy cotton from foreign countries like India, China
etc. Where cost of cotton is low that helps an organization to produce t-shirt at low cost. For
example- a cement manufacturing company finds and examine that the cost of raw material and
production are lower in some other countries because of low manpower in that country where

they shut down domestic operations and set their operations in foreign countries (SUPPLIER
MANAGEMENT, 2021). In terms of Marks and Spencer Company highly focus on global
procurement sources because it helps in lowering the company operational cost. There are
several methods which are associated with global sourcing that is demonstrated below:
 Preliminary research that is investigation and tendering- It is the core method or step
which is adopted by an enterprise to recognize the core and non- core operational
activities, customers and requirements of markets along with analyzing rivals (Pheng,
2018). The main motive of this global sourcing method is to develops the company
objectives, brand positioning. In terms of Marks and Spencer, the procurement specialist
of a company outlines a plan by researching operational activities within global countries.
Operational activities are those activities of business which linked with the providing of
goods and services within marketplace. It helps business firm to measures the
performance of workers within several countries according to the wage rate. It would
document the company procurement process plan.
 Market and suppliers evaluation- In this stage business enterprise must develop the list
of suppliers as per their benchmarks that is highly suitable for company to examine the
appropriate suppliers that fulfills the requirements of company efficiently and effectively
(Jo, Lee and Pyo, 2018). In this method of global sourcing organization can effectively
evaluate the benefits of particular projects or profits. In terms of Marks and Spencer, that
is a food specialist in global market. Due to this unique position in marketplace company
highly focus on their suppliers procurements by finding the low cost suppliers within the
global market so that high quality products are consumed at low cost that helps in
maximizing profit margin along with sales volume. Marks and Spencer food supply chain
is very complex in nature because company produced their food products over 800 sites
located in 44 nations that 90% are European countries. In this raw materials are gathered
and sourced from 70 countries. In this stage manager of Marks and Spencer evaluated
their market and suppliers and finds that they get profitable results in European markets.
To get the raw material for producing goods and services marks and spencer get
profitable results when they buy the material from European countries because in their
they cannot pay high trade tax and also get the affordable material as compare to another
countries.

 Selection of the suppliers- In this step the results is based on selecting the final suppliers
by negotiating the cost for products and cumulating in supply agreement (Cragg and
Chraibi, 2020). For instance- In terms of Marks and Suppliers, manager would select the
final suppliers within European countries and negotiating the cost of raw material with
them. It helps in managing the operational cost along with finance of the business firm so
that firm would invest in several other activities which are essential for attaining high
success and sustainability in marketplace.
 Implementation- performance analysis schedule is to be developed, outline several
aspects within implementation process. In this implementation team are associated with
procurement agent so that it could provide successful results. In this companies are
shared agreement with suppliers related to recourses so that best logistical arrangements
are developed. For example- In terms of Marks and Spencer, procurement manager focus
on implementing the process of procurement funds so that they get profitable results in
marketplace. In this manager can signed the agreement with suppliers who provide raw
material at low cost so that profitable outcomes are enjoyed by company.
 Performance monitoring- it is the crucial method of global sourcing where business
enterprise can measured the performance of suppliers independently by associating with
resources that they are provided to the company (Liu, Liu and Yang, 2020). This
monitoring would be done on timely basis so that problems related to suppliers are
resolved. For example- In context of Marks and Spencer, procurement manager measured
the performance of suppliers of food so that best result is generated by a business
organization. If the monitoring of suppliers are done effectively than it gives successful
results to company. This also helps in easily adapting the dynamic market environment
which is highly essential to sustain in competitive global market.
In terms of Marks and Spencer, procurement team focus on using the BS 8903 to present
sustainable procurement within its team and their related working. Marks and Spencer are
working for non -merchandise procurement aspects where procurement teams of business
enterprise are highly responsible for purchase of all non-merchandise products and services that
are useful for Marks and Spencer to function properly. In this they set the budget for non –
merchandise products which are around £2bn of yearly spend within information technology,
logistics, international and corporate retail services, marketing. This team is organized by Group

head of procurement department. The procurement team offers supports to the buying process
that provide specific negotiation expertise to stakeholders within the business (Stepanyan,
Spector, and Okhotnikov). In order to run sourcing projects that team of the marks and Spencer
acts as a corporate coach that supports the organization with negotiation toolkits, training and
buying guide. To get the sustainable procurement company need to focus on financial terms,
risk, organizational values, marketing, and stakeholders expectations because all these are highly
essential for business success and long term survival. Marks and Spencer focus on adopting BS
8903 aspects as a leading source which effectively guides the sustainability objectives in
corporate procurement activities. This BS 8903 is to be launched with the goal of becoming a
successful leader in the retailing market. In terms of gaining and fulfilling organizational values
sustainable procurements will develops targets and commitments more strong. In terms of
marketing, within Marks and Spencer sustainable procurements would drive sales in ethical
manner where fair trading of good are done to build a positive image and also helpful in
attracting talent within an organization. This sustainable procurement builds awareness within
internal and external stakeholders of company and also helps in improving communication
between different stakeholders.
It is to be critical examine that the method of global sourcing helps in setting the
standards for suppliers who are working with the company (Harland, and et.al., 2019). It helps in
developing the business relationships where Marks and Spencer expect that their suppliers
focusing on raising standards and improve their working conditions by internationally identify
the code of conducts. For global enterprise it is highly essential to deliver the products and
services to customers as per their needs and requirements which do not hurt the values and
beliefs of any country customers. It helps in developing high customer’s base within
marketplace. As doing the business globally it is the responsibility of procurement manager to
creating awareness in the suppliers related environment responsibility that means they could
deliver that raw material to company which cannot harm the environment. In this suppliers focus
on meeting all local and international regulations and also completed supply chain risk
assessments to examine the impact of environment. Over the past previous year there is an
ongoing negotiation which crucially affects the food and apparel companies in the global
environment. An improved free trade of products and services helps business enterprise to save
their cost and lead the competitive pricing within market along with developing the high demand

of products and services in global market. As company like Marks and Spencer can buy the raw
material from European countries suppliers because from these countries company can get high
beneficial results. But due to the uncertainty of Brexit, Marks and Spencer face issues in free
trade due to which they also deal with the consequences related to negotiate with supplier. At the
time of negotiating a business firm can assigned the agreements so that negotiation rate will be
fixed and suppliers supply goods and services properly.
While doing the global sourcing companies face several risks. At the time of getting
reward related to lower production cost along with high quality business enterprises faces risk at
the time of global product sourcing (Bag, and et. al., 2020). Along with offering advantage
global sourcing also creates risk for the companies that are demonstrate below:
 Language barrier- It is one of the major risk that an organization might face at the time
of procurement sourcing. When the suppliers of business enterprise do not understand the
language of domestic country of country on the other hand of firm staff member are not
fluent in the language based on suppliers than it represent as a language barrier (Owusu
and et.al., 2020). For instance- Marks and Spencer manufactures t-shirt for this they need
cotton as a raw material (What Is Global Sourcing?, 2021). At this time if suppliers
cannot understand the language of Marks and Spencer manager then it will create
difficulty in selecting and final the amount of purchasing the material.
 Compliance issues- Global sourcing companies, suppliers who present in different
market place must associated with the social responsibility, environmental, quality, safety
standards etc. if any of these aspects are fail to fulfill then it will affect the reputations in
customers eye (Lingard, Oswald and Le, 2019). It is highly essential for the suppliers,
companies to understand standards and policies of another country with the deal are
finalized. For instance- In terms of Marks and Spencer procurement manager and
suppliers of company are effectively understand the standards and compliance in which
country they deal so that dealing is to be doe positively and effectively.
Global procurement strategies that leads to procurement excellence and improve the
Competitive advantage of an organization
Procurement strategy defines as a long term planning related to cost effective decisions
that includes essential supplies from the list of distributors who distributes quality products and

services on specified period of time and enduring purchase terms. In terms of Marks and Spencer
procurement head takes the decisions related to their suppliers so that firm get qualitative raw
material at low cost that is beneficial for organization purchase decisions and also helpful in
gaining competitive advantage. There are several global procurement strategies that support
business enterprise in improving its competitive advantage and sustainability for a longer period
of time within global market. These strategies are demonstrated below:
 Winning strategy: standardizing the purchasing chain- it is one of the best global
procurement strategy that is implemented by an organization to take competitive
advantage (Zhou and Ji, 2020). In this strategy firm will set several pathways that
contributes in improving excellence of procurement performance. These pathways are
based on selecting the suppliers from global level and choose the cost effective suppliers
who also provide quality products. In terms of Marks and Spencer, procurement head of
the company focus on making the supply chain smooth for this they Always focus on
examine the suppliers and select the best one that is from Europe in relation to food and
India or China in relation to buy cotton. To get the material from suppliers manager
highly focus on making invoice so that issue related to not understanding the policies and
standards are resolved and firm get the material on time. This helps in providing the
competitive advantage in their long term survival. As getting low cost material with
quality from suppliers company can enjoy high profit margin along with high sales. In
this business enterprise also focus on setting their financial cost so that data optimum
utilization of funds would be done and is standardized the purchased chain.
 Winning procurement strategy: Focusing on managing supplier’s risk- It is another
one of the best strategy that is implemented by an organization to gain excellence and
competitive advantage in the global corporate world (Kaur and Singh, 2019). The
suppliers risk demonstrated by that risk in which firm face the issue from suppliers side
related to get getting the goods and services on time or supply of the supplier is failure to
supply limited stock to company. This will reflect as a systematic risk that a company can
face at the time of global sourcing. In aspect of Marks and Spencer, procurement
manager highly focus on suppliers supplies. For this if they tie up with new suppliers than
they take a trial of the products that is easy to obtain within a day so that issue related to
failure of supply is to be resolved. Due to this company get systematic production that

helps in getting profitable result within global market and also helps in gaining
competitive advantage for the same.
 Winning procurement strategy: centralizing supplier data- It is another global
procurement strategy that is taken by an organization for their long term survival and
getting profitable results within international marketplace (Burlakova, Karkh and
Ruzhanskaya, 2019). Within a company decision related to global sourcing procurement
are based on data and figures that are based on large variety of sources to document. For
instance- the mapping of suppliers facilities or the product specifications that they
provide to companies for preparing output. Suppliers innovation strategies etc. these data
are highly useful for an organization within a single database because it helps in
improving the procurement strategy. In context of Marks and Spencer procurement head
focus on this strategy to get winning results within global market and it is only possible
when they collect suppliers data in centralized manner so that it is to be available at the
time of processed. It helps in providing the best supplies of products in the global
countries so that firm will take advantage of competitive gaining the rival firms.
 Winning procurement strategy: Incorporating the department into global
innovation system- Within competitive market companies highly focus on offering
innovative products to customers as it is highly essential to get the competitive advantage
within international market and creating high brand value (Cherian, Munuswamy and
Jasim, 2020). In this company do collaboration with global suppliers in a cost effective
manner who offers innovative material so that firm get profitable results. In this Marks
and Spencer procurement manager highly focus on this strategy where they tie up with
India cotton suppliers to get organic cotton for making a t-shirt. In this procurement head
also analyses that they get low wage labor within India so that manager of Marks and
Spencer also take advantage of it and produce their t-shirts within India. This helps in
presenting the products in cost effective manner that gives profitable results to company.
It also helps in gaining competitive advantage because company sale their organic cotton
t-shirt at reasonable cost that attracts number of customers towards it. In this business
enterprise also looking for digitally transforms their procurement that helps in easily
connected with global sourcing suppliers so that high quality material would be prepared.
It helps business firm to connect with suppliers for more time and this will developed the

procurement strategy agile. In this digitalization also support green purchasing this helps
in saving the cost of business firm and gaining high profitable results in their survival
within global market.
CONCLUSION
From above report it is to be concluded that global sourcing is an essential concept for
business entity to save cost of the organization. It helps businesses to get sustainable results in
their long term survival. This report inculcates the various methods of global sourcing that is
used by an organization to lowering the cost of their products so that they can effectively attract
the customers. This sources helps supply chain management of a business Enterprise in gathering
the raw material at low cost. Further it inculcates the global procurement strategy that helps in
leading the organization effectively and also helpful in generating higher success in global
marketplace.

REFERENCES
Books and Journal
Bag, S., Wood, L.C., Mangla, S.K. and Luthra, S., 2020. Procurement 4.0 and its implications on
business process performance in a circular economy. Resources, Conservation and
Recycling. 152. p.104502.
Burlakova, I.V., Karkh, D.A. and Ruzhanskaya, L.S., 2019. Applying category management in
procurement in manufacturing companies. Upravlenets. 10(6). pp.54-66.
Cherian, T.M., Munuswamy, S. and Jasim, K.M., 2020. E-procurement practices to improve the
efficiency of vendor transactions in Indian cement companies. International Journal of
Procurement Management. 13(4). pp.443-461.
Cragg, T. and Chraibi, S., 2020. Reviewing procurement: a change management model based on
action research. International Journal of Procurement Management, 13(6), pp.737-755.
Harland, C., Telgen, J., Callender, G., Grimm, R. and Patrucco, A., 2019. Implementing
government policy in supply chains: An international coproduction study of public
procurement. Journal of supply chain management. 55(2). pp.6-25.
Jnr, B.A., 2019. A developed software agent-knowledge-assisted procurement management tool
for retailing enterprise. VINE Journal of Information and Knowledge Management
Systems.
Jo, S.H., Lee, E.B. and Pyo, K.Y., 2018. Integrating a procurement management process into
critical chain project management (CCPM): A case-study on oil and gas projects, the
piping process. Sustainability. 10(6). p.1817.
Kaur, H. and Singh, S.P., 2019. Sustainable procurement and logistics for disaster resilient
supply chain. Annals of Operations Research. 283(1). pp.309-354.
Lingard, H., Oswald, D. and Le, T., 2019. Embedding occupational health and safety in the
procurement and management of infrastructure projects: institutional logics at play in the
context of new public management. Construction management and economics. 37(10).
pp.567-583.
Liu, J., Liu, Y. and Yang, L., 2020. Uncovering the influence mechanism between top
management support and green procurement: The effect of green training. Journal of
Cleaner Production. 251. p.119674.
Owusu, E.K. and et.al., 2020. Towards corruption-free cities: Measuring the effectiveness of
anti-corruption measures in infrastructure project procurement and management in Hong
Kong. Cities. 96. p.102435.
Pheng, L.S., 2018. Project procurement management. In Project Management for the Built
Environment (pp. 177-193). Springer, Singapore.

Rane, S.B., Narvel, Y.A.M. and Bhandarkar, B.M., 2019. Developing strategies to improve
agility in the project procurement management (PPM) process: Perspective of business
intelligence (BI). Business Process Management Journal.
Stepanyan, T. M., A. A. Spector, and I. V. Okhotnikov. "Logistics cluster as integrated
procurement management solution for managing production chains for construction
investment projects." In Proceedings of the 32nd International Business Information
Management Association Conference, IBIMA 2018-Vision 2020: Sustainable Economic
Development and Application of Innovation Management from Regional expansion to
Global Growth, pp. 7236-7243. 2018.
Zhou, J. and Ji, Y., 2020, May. Analysis and Design of Government Procurement Management
System. In Proceedings of the 5th International Conference on Distance Education and
Learning (pp. 148-151).
Online
SUPPLIER MANAGEMENT, 2021. [Online]. Available through:
<https://corporate.marksandspencer.com/sustainability/food-and-household/supplier-
management>
What Is Global Sourcing?, 2021. [Online]. Available through: <
https://axiasourcing.com/2019/04/16/what-is-global-sourcing/>