SCM: Analyzing Procurement and Supplier Development Strategies

This report provides a comprehensive analysis of procurement and supplier development within the context of supply chain management. It begins by outlining the key objectives of procurement, such as securing the right price, meeting customer needs, promoting cooperation, and developing information systems. The report then examines the political, economic, and technological factors that influence suppliers, buying organizations, and global sourcing strategies, using examples of Singaporean companies like Robinsons & Co. and international corporations like Marks and Spencer. Furthermore, it identifies essential criteria for selecting successful strategic suppliers, including cost-effectiveness, core competencies, and flexibility, with illustrations from companies such as Takashimaya and Sheng Siong Group. The report concludes by emphasizing the importance of cross-functional teams and supplier collaboration in achieving successful supplier development, citing Cold Storage supermarket as an example. Overall, the report highlights the critical elements and considerations for effective procurement and supplier development in today's global business environment.

RUNNING HEAD: SUPPLY CHAIN MANAGEMENT 0
“PROCUREMENT AND SUPPLIER DEVELOPMENT”

SUPPLY CHAIN MANAGEMENT 1
Table of Contents
Question-1........................................................................................................................................2
A) Objectives of procurement................................................................................................2
B) Factors affecting suppliers, buying organizations and global sourcing strategies............3
Political factors........................................................................................................................3
Economic factors.....................................................................................................................3
Technological factors...............................................................................................................4
Question-2........................................................................................................................................4
A) Criteria for identifying suppliers which get success in Strategic supplier development. .4
Cost..............................................................................................................................................4
Core-competencies......................................................................................................................5
Flexibility.....................................................................................................................................6
B) Importance of Cross-functional teams and supplier in development success...................6
References........................................................................................................................................8

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Question-1
A) Objectives of procurement
The major objective of the procurement is to support the company to pay the right price
according to the products and services. It also helps in satisfying the needs and requirement of
the customers by saving the time of the company; this is done by organizations through avoiding
the unnecessary steps in the procedure. For example, Best Denki electronics retail company
follows various steps for the effective procurement that is it develop the list of the suppliers and
increase negotiation with the suppliers regarding the contract. This is reducing the risk of paying
adequate amount and reduces the cost of the company (Bestdenki.com.sg, 2020). Therefore, it is
also estimated that in the year 2018 it also helps the company to ensure that the management of
the risk is done in adequate and appropriate manner (Tabatabaei & Bazrkar, 2019).
The other objective of procurement is to increase the promotion of cooperative
arrangements and supports the company to develop by using the performance measure of
procuring the goods. This helps in reducing the cost and expenditure of the company and allow
the enterprises in invest in effective area. For example, in the year 2019, there are various tools
and techniques which can be used to measuring the procurement performance by the companies
in Singapore. Therefore, it is described that majority of the companies used procurement KPI
management tools and Quality delivery and cost approach. It is because this supports in reducing
the cost while at the same time maintaining the quality of goods and services (Saberi, et. al.,
2019).
The objective of procurement is also to develop the information system so that
information is shared among all the suppliers and other stakeholders so that it reduces
misunderstanding and leads in effective management of operations. Furthermore, it is estimated
that companies in Singapore also adopt structured approach to provide training to the staff
members so that at the same time staff members also developed (Rezaei, et. al., 2019).
The purpose of procurement is also to ensure that the product and services are procured
through higher professional standards as well as probity. This also enlarges the scope of the
business and support the company to conduct the business electronically. For example, Isetan

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which is the departmental store company in Singapore also adopt balanced scorecard approach
so that performance of the procurement measured in timely manner. This supports the company
to understand the issue at right time and make changes accordingly and this also leads in
decreasing the wastage of the company. This also helps the organization to invest in other areas
so that which increases the operations of company (Pettit, Croxton & Fiksel, 2019).
B) Factors affecting suppliers, buying organizations and global sourcing strategies
Political factors
The political factors play an important role in influencing the suppliers and organizations
which buying the goods and services because of changes in the tax rate in different countries
which affects the company to pay more cost for the product and services that is for purchasing
the raw material and various other resources. The level of corruption and environmental law
through which the business has to conduct their operations also affect suppliers to operate
activities by reducing their effect on the environment. This leads in increasing the complexities
for the organization (Paul, Moktadir & Paul, 2019).
For example, Robinsons & Co. is the department store in Singapore which conduct their
operation in Singapore, affects the company from the government regulations through which
company cannot buy from other countries. Therefore, in the year 2018 the company cost more
for buying the products because of raise in tax rate in other countries and through developing
several involvements of the government in agreements this also increase the activities of the
company. Furthermore, it also influences the global sources strategies of Robinsons & Co. it is
because of finding difficulty in selecting the supplier due to more intervention of the government
(Zoominfo.com, 2020).
Economic factors
The changes in the interest rate of the international countries also influence the
companies in negative manner and there are various other factors which influence the operations
of the buying organizations. The buying capacity of the company also affect the company to buy
the products and to pay the suppliers, this also affect the suppliers of the company. Furthermore,
the income of the consumers and suppliers of competitors also influence company to select the
marketplace and manufactures to supply product globally (Muñoz-Villamizar, et. al., 2019).

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For example, Marks and Spencer Group plc, is the company which specializes in selling
clothing, home products and other food products to the consumers. The company focuses on
developing various strategies to expand in international market. The global competitors affect the
company to select the supplier and do more negotiation with the supplier because of increasing
the power of suppliers. This also effect performance measurement strategies this is due to the
reason that through this performance of the company affects in negative manner. Therefore, the
company makes various initiatives and an increase employee that is in the year 2019 the
company has 80,000 employees to conduct functioning and perform activities so that it could not
influence by economic factors (Statista.com, 2020).
Technological factors
There are some technological factors such as technologies which are used by the
competitors for inventory management, procedure for the production and distribution of the
products affects the supplying of the product. It is estimate that this sometimes also become
difficult for the buying organizations purchase the technology so that efficient functions will be
done in comparison to their competitors and this also influence the decision of the suppliers
towards the company (Marak & Pillai, 2019).
For example, Don Quijote is the discount chain store which also offer clothing, food,
goods and other electronics items in Singapore, therefore it is estimated that in the current year
company find problem in selecting the technology which can used in Thailand. It is because of
several well-known companies which use efficient technology and software for distribution and
storing the products in warehousing. Through, this supplier of the company also gets affects to
select the audience and to find the appropriate technology which can deliver products quicker
according to the expectations of the consumers (Plunkettresearch.com, 2020).
Question-2
A) Criteria for identifying suppliers which get success in Strategic supplier development
Cost
The first important criteria are the cost and benefits which supplier provides to the
company that is the amount of price saving suppliers does for the company by improving the

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activities and by selecting significant structure through which logistics activities will be
performed in efficient manner (Kumar & Rajan, 2019). In this criterion the supplier is selected
which improve the quality through purchasing the products in various sections so that wastage
will be reduced and it the same time the quality of the organization is managed in long run (Li,
Fang & Song, 2019).
For example, Takashimaya Company is the departmental store chain which sells varieties
of products to the consumers which starts from the wedding dresses to all the electronics
products. The company adopts various strategies for supply chain management so that supplying
and purchasing of the product is done in effective manner in various other countries such as
China, Thailand etc. Therefore, it is estimated that company focuses on specific criteria so that
suppliers gets successes in the strategic supplier development. Through, Identification Company
focuses that buying is done by the reducing the cost and by concentrating on quality, so company
identify the supplier by viewing that suppliers save the price and manage quality as well as also
improve the internal operational cost of Takashimaya (Bloomberg.com, 2020).
Core-competencies
The other specific criteria which are adopted by the companies so that it gets success in
long run and can get involve in strategic supplier development. The company focuses on the
core-competencies of the suppliers that are the internal capabilities and abilities of the suppliers
towards the relevancy of the project. In this company also concentrate on finding the
involvement of the supplier with the top-level executives of the company and earlier status of the
supplier regarding the managing of quality, price and customer satisfaction. In this company also
involve in finding the relationship of the organizational capability and supplier capability
towards the particular project (Ghadge, et. al., 2019).
For example, Giant Hypermarket is the well-known hypermarket which has number of
locations that is in the year 2019, the company has 80 store outlets. The company was founded in
the year 1977 and develop highly concentrate on the criteria for the identification of the suppliers
which includes that the capabilities of the suppliers towards the project (Foodtradenews.com,
2020). The company analyze that suppliers has appropriate skills to manage the quality of the
product, reduction in the price and at the same time satisfy the needs and demand of the
customers. It is because through this company understand the potential of the customers and also

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increase the quality by maintaining relationship and this leads in increasing the quality of the
organizations. This also helps the company to manage and connect the potential of the company
with the capability and ability of the suppliers.
Flexibility
The flexibility is one of the important criteria in which company include various factors
to select the supplier for strategic supplier development because this supports the company to
identify the competitiveness of the supplier and dependency of the suppliers towards the
company. In this various area is also identified so that policies which increase effectiveness of
the company is discussed. In this company also concentrate on describing the long-term risks and
threats of the suppliers, so that effects of the supplier are improved (Bozarth & Handfield, 2019).
For example, Sheng Siong Group is the supermarkets which also provide quality products
to the customers and earn revenue up to $829 million in the year 2017. The company identify the
supplier for strategic supplier development by understanding their flexibility that this capability
to bear risk and to use the risk-taking strategies. In this the competitiveness of the company is
increased because of understanding the level of competitiveness of the supplier. This supports
the company to gain competitive advantage and to increase the capability to purchase and supply
the products globally (Shengsiong.com.sg, 2020).
B) Importance of Cross-functional teams and supplier in development success
The cross-functional teams and supplier is considered highly important and significant
for the supplier development because through this cross-function team leads in increasing the
capability of the organization and supplier development. So that through this organization can
work with various different suppliers so that outcomes of the buying organization will be
improved and it leads in managing the needs of the buying organization with the expertise of the
supplier for supplier development.
For example, Cold storage supermarket is the supermarket chain which increase
operations of three supermarkets brands in Singapore. The company also considered cross
functional team and supplier an important component for supplier development. It is because
through this it leads in maintaining the full transparency between the supplier and the company
and also supports the company improved their quality and supports in identifying the new design

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and structure for the suppliers (Crscoldstorage.co.uk, 2020). In the year 2017, it is estimated that
cross-functional team results in increasing the supplier responsiveness and leads in satisfaction of
the customer (Badi & Murtagh, 2019).
The cross functional team and supplier is considered significant ingredient for supplier
development success because it provides more information regarding the collaboration of the
supplier. This leads in improving the reliability of the new design so that it increases and leads in
raising the success of supplier development (Abdel-Basset, et. al., 2019). It is important because
this supports in describing the different opinion of the suppliers, it is because of maintaining
transparency and improving the collaboration of the supplier and organization. It also provides
information about the supplier responsiveness and also increased the opportunities for the
supplier to develop by performing various activities so that satisfaction level of the customer
increases. The cross-cultural team supports in understanding the needs and requirements of
customers and support in determining the things through which the supplier can use to deliver
the products in timely manner so that satisfaction of the employees is increased (Ajalli,
Mozaffari & Salahshori, 2019).

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