Walmart's Purchasing Management: An Effectiveness Analysis Report

This report analyzes the effectiveness of purchasing management, focusing on three key aspects: supplier selection criteria and related issues, purchasing costs, and the use of information and communication technologies (ICT). The report begins with an introduction to purchasing management, emphasizing its strategic importance for organizations like Walmart. It then delves into supplier selection, highlighting the need for evaluating suppliers based on capabilities and competitive processes. The discussion on purchasing costs covers strategic cost management, low-cost country sourcing, and the importance of efficient vendors. Furthermore, the report examines the role of ICT in streamlining processes, improving information flow, and enhancing supply chain operations. The conclusion emphasizes the importance of research and adherence to fair competition laws in purchasing practices. The report draws on various academic sources to support its analysis and provides practical insights for improving purchasing strategies.

Analyze the effectiveness of these 3 aspects of purchasing management
Report

Contents
Introduction......................................................................................................................................1
Supplier selection criteria and related issues...................................................................................2
Purchasing cost................................................................................................................................3
Use of information & communication technologies........................................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
The purchasing refers to the business or the organisation which attempts to acquire the goods or
the services mainly to accomplish the goals of the enterprise. This is mainly through handling the
organisation attempts to set the standards in the process between the organisations. The
procurement includes the expediting, supplier quality and the Traffic and Logistics. The best
organisation tends to recognize about prospering in the long-term activities with the customers,
suppliers, employees, investors and the government with the public interest (Doyle et al., 2017).
The purchasing management department makes sure of the different goods and the supplies with
the inventory that needs to operate with the handing of the orders and the other stock methods.
The responsibility is mainly to control the costs with the goods that are order, handled and settled
with the use of the different inventory levels and then building the strong relationship with the
suppliers. Being the purchasing manager of Walmart, the focus of my focus is on the
responsibilities to buy and approve the acquisition of the goods and the services that are required
by the company. It is important for the purchasing manager to interact with the suppliers and the
other channel members who could easily focus on how the suppliers and the other people view
the firm. It has been seen that 60% of the sale of the firm is controlled through the functions of
purchasing with the positional responsibilities that are same for the construction contracts as
well. The purchasing manager tend to take hold of the different supervisions with the
management of how the small companies can handle the agents or the buyers (Isley et al., 2016).
The role of the purchase manager is mainly to handle the strategic business function to perform
with the window set to handle the prime functions of purchasing which also includes the
sensitivity to the different market functions and situations. One also need to give the feedback to

the different functional areas, where the purchase manager tends to play the important role for
the right quality of the material at the right time. For this, the system also includes the just-in-
time purchasing with the quality management and product manufacturing, where the major
importance of the purchase manager tends to increase depending upon the standardised issues.
The role of the purchasing department is mainly to make sure of:
a. The ensuring of the availability of the quantity and the quality of material which is set for
handling and the smooth functioning of the department of production (Laudon et al.,
2016).
b. The production and the procurement of the materials are depending upon the low costs
for the company to ensure that the supply of the quality materials is done in an effective
manner.
c. The awareness with the substitution of the materials is available in the market to make
sure of the prices and the utility of the organisation.
d. The identification and the development of the new vendors is mainly to maintain a good
relationship with the vendors, vendor relations with the vendor monitoring or setting the
development of the new vendors for the purchasing of the executive jobs.
e. The development of the procedures and the systems is important for the purchasing
department (Tchokogué et al. 2017).
Supplier selection criteria and related issues
The suppliers need to evaluate the compeititve environment with the progressive firms which can
produce the quality products at the reasonable pricing. The buying firms need to select the
suppliers who are based on the capabilities and the competitive processes. The trend is mainly to

reduce the supplier base with the outperformance of the competition, suppliers need to clearly
evaluate and analyse the system. The purchasing needs to be done with the power placed in the
hands as the industry has been able to realize the value-added capabilities of the suppliers as
well. (Kuafmann et al., 2017). The use of outsourcing is the major competitive weapons with
increasing business where it is not easy task for the management to decide and make the lease or
buy the component the parts and services. The buying organisations look for the assessing of the
value of the consultants and the strategic partners where the buyers do not recognize about the
products and the services that are approaching to the level of maturity. The buying of the success
factors is mainly through the different capabiliites and the expertise of the in-house team along
with the specification of the product attributes, forecasting all the requirements and assuring the
right quality with the reasonable pricing. (Deken et al., 2016)
The certification includes the setting of the criteria with the supplier’s equipment and the record
keeping capabilities. The designing with the certification includes the quality assurance with the
other production methods, value analysis and the cost accounting methods. The organisation
need to work on the retail and the industrial standards where there are different purchasing
agents and the marketing manager who can meet the perceived needs and the wants of the firms
and their customers.
Purchasing cost
It is the major factor where the strategic cost management is considered as a major juncture to
manage the pure cost in the supply chain management and then recognizing the pure costs with
it. The discussion is mainly related to the low-cost country sourcing and the domestic sourcing,
where the decisions are important to be made for the direct investments and the use of the

domestic sourcing methods. (Jääskeläinen et al., 2016). Here, the trends are related to function on
the system planning with the driven strategic costs and the companies working on the
implementation of the strategic cost management. For the purchasing manager, it is important to
focus on the group of the efficient vendors who will be able to deliver the quality goods on time.
The procurement savings and the use of centralised purchasing methods will concentrate on the
procurement activities with the single source procurement that are based on the use of:
a. The supplier optimisation which includes how the company tends to make the choice for
the optimisation of the mixture of the vendors who tend to provide the best prices and the
terms. The processes are mainly found where the suppliers are not able to provide the
quality services when compared to the prices which are discarded. (Paesbrugghe et al.,
2017)
b. The Total Quality Methods also require working on providing the increasing quality
service with the zero errors as this will help in easy purchasing with the best practices
through the different tools like the six sigmas.
c. The risk management includes the companies which are mainly concerned about the
supply chain. Here, the supply products are mainly set at the different standards where
the major focus is on handling the pricing with the concern of working over the risks
management. (Matthyssens et al., 2016)
d. The globalised outsourcing is set with the larger market source with the development of
the vendor and the other criteria. The company need to focus on the green purchasing that
will help in improving the development process that assist the vendors. The suppliers are
unable to perform when there is just one supplier for the product. Hence, the strategy is

based on the recycling and the purchasing of the products that might have negative
impact on the environment.
Walmart need to focus on the purchasing strategies to promote their products. It also need to
focus on the handling of the different procurement practices which includes the needs of
recycling and the purchasing of the goods. With this, the analysis is also based on the
classifications with the supply chain visibility for the successful reduction of the cost. Through
this, there is an increased Return on Investment with the clean and the consistent analytical
applications that are required for the 360 views of the products and the raw materials.
Use of information & communication technologies
With the change in technology, the focus is also on how the company Walmart can focus on the
improvement of the supply chain operations. The trends of the social media network with the
open source systems helps in keeping up to the market changes. The streamlined processes and
the increased information is mainly to obtain the access to the different necessary data patterns.
Here, the firms also tend to make the purchases for the business to business ecommerce with the
software systems that come from the PeopleSoft etc. The systems also keep a streamlined
purchasing process with the facilitation of the communication in the internal and the external
sector. The systems also include the strategic planning with the other activities that are based on
the improvement of the tools and the trends. It is conjugated with the purchasing and the IT
technology changing the effective source products and the services. The logistics are important
for the movement of the goods and for this, there is a need to handle the inbound and the
outbound of the organisation. This will help in controlling the design and manage the firm for the
distribution system (Heikkilä et al., 2016). The standards are set with the warehouse and the

distribution points that include how the purchasing plays an important role for the sourcing and
the pricing of the logistics services. The department depends on the performance with the supply
chain management involvement. The IT is important for the supply chain and the procurement
functions which helps in enabling the system to coordinate the activities and manage the supply
of the goods. With this, the manager also need to understand about the requirements of the
computers, where there is an easy recognition of the data equipment and the communication
technology. This includes the factory automation systems and the other hardware and services.
For the purchasing manager, the focus is mainly on organisation development with IT
infrastructure focusing on the compeititve positioning of the business like the cycle time
reduction, implementation of the redesigned cross functional processes. The involvement of the
supply chain relationship through the information technology leads to the major impact of the
corporate obsession. Hence, being the purchasing manager of Walmart, it is important to focus
on serving the customer in the best manner along with focusing over the reduced inventory and
the human resource requirements to a compeititve level. The information flow is major as the

strategic planning with the supply chain organisational dynamics. The enterprise change
management works with the shift of the power from manufacturers to the retailers where the
retailers sit to hold the different positions in terms of the information access for the supply chain
through different technologies (Heikkilä et al., 2016). The information sharing has always been
important and effective for Wal-Mart which helps in improving the viewing of the processes
with the cost reduction, productivity and the improvement of the product and market strategies.
Conclusion
It is important to focus on the purchase research which is important for the purchase manager to
involve the present trends that are about the cost of the different inputs materials. The industrial
conditions and the international developments seek for the proper delivery of the products which
provides the suppliers with the accurate information, obeying all the national and the
international laws which are related to the fair competition (Heikkilä et al., 2016). The issues are
defined with the selection of the candidates and then awarding the contracts to provide the
information with the agreements, promises and the payment deadlines in an effective manner.

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