Purchasing Management: Supplier, Cost, and ICT Influence Report

This report delves into the critical aspects of purchasing management within a retail context, emphasizing the strategies essential for business success. It initiates with an overview of the purchasing process as a cornerstone of retail operations, highlighting the importance of supplier management, cost analysis, and the integration of Information and Communication Technology (ICT). The report examines supplier management criteria, including cost, risk, service, delivery, convenience, social responsibility, and agility. It also provides a detailed analysis of purchasing costs, encompassing acquisition, transportation, storage, and delivery expenses. Furthermore, the report explores the impact of ICT on purchasing operations, emphasizing the role of technology in facilitating efficient information transfer, promoting interactions between organizations, and streamlining the supply chain. The conclusion stresses the significance of these strategies for enhancing profitability and overall business performance, recommending the adoption of technology and cost-effective approaches to optimize the purchasing process.

Running Management: PURCHASING MANAGEMENT 1
Purchasing Management
Name
Institution

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Introduction
Every business activity is a continuous process that requires proper strategy to succeed. In the
case of a retail business, the purchasing process is the first and most important activity as it
determines the success or failure of other activities later conducted in the business. There are
strategies that require a careful consideration when purchasing products to ensure for efficiency
and satisfaction on both sides of the business. The paper discusses the supplier management
criteria, Cost management and ICT influence on supply. All these strategies requires a special
approach as well as more recommendations for future use.
Retailing is the closest supplier of goods and services to the consumers in both small and large
quantities. Singapore is known for the many retailer businesses dealing with different products
for the satisfaction of goods and services of the people around the area. Lucky Plaza, for
example, is a retailer on Orchard road which deals with low-priced products for low budget
consumers. Unlike other retailers along the same street who deal with luxurious products
afforded by the wealthy, Lucky Plaza can cover for almost all consumers in the market due to
their fair prices (Choi, 2006). Their competition is therefore in the positive direction as the
demand for their products increases with the reduced prices. The main items sold here clothing,
accessories, used books, chocolate, sweets and many others that come either brand new or used
but in good condition. The retailers on the Lucky Plaza Street strive to satisfy for the large
market of the local consumers who are the main buyers of their products. They strategize on
quality, affordability and excellent customer relations that attract more clients in the outlets
(Kahraman, 2003). The future of the business seems promising as they plan on advancing into
other streets and capturing a larger market for their products.

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Supplier Management criteria
There are several attributes that an organization must consider when planning their activities
with supplies. The approach is necessary because, through the vendor’s activities, the team
determines the quality of products they receive, the prices and eventually the profits they make.
Some of the important aspects that every organization should consider include cost, risk, service,
delivery, convenience, social responsibility, and agility. All should be under control to ensure
that there is a maximum benefit to both parties (Bhutta, 2002).
There are many risks involved in the supply of right from the source to the business which if not
well covered might significantly affect the progress of the organization. Some suppliers are
based on the natural environment whereby the group is expected to get involved in the extraction
of products, especially raw materials. In this kind of setting, some risks involved are accidents
and loss of the products of mining (Jabbour, 2009). Other risks are involved during the
transportation process regarding accidents that might result in high losses for the business. It is
therefore important to consider setting aside funds to cover for the risks in case they occur and
most importantly come up with strategies to reduce such occurrences.
The service and delivery usually fall under a similar category in that suppliers should offer
quality services while delivering their products to their clients. The client here is the business
whose primary purpose is to get the products they order in their right quantities, quality and at
the right time. The firm should get in touch with a trustworthy supplier who is ready to observe
timing and other terms of delivery for a positive impact on the organization (Boran, 2009).
Regulating the delivery is also an issue that affects the structure in such a way they can satisfy

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their consumers without delays. Buyers are usually interested in a business that provides for all
their needs anytime they visit.
Convenience is an issue that affects all the aspects of supply and might be of positive or adverse
impact on the activities of a business operation. The more convenient the suppliers are the best it
is for business activities of the recipient firm. It is best for an organization to choose providers
who are readily available regarding transport and communication. Most of the delays
experienced in supply are caused by inconveniences of distance and time. The business should,
therefore, opt for methods that bring them closer to their sources of materials. If for example, the
essential supplies are vegetables from a certain farm, then an organization should choose the
ones that have quick access to infrastructure. It is in this case that they also consider timing and
security to avoid any losses that might result from theft and delays (Jabbour, 2009). If the
supplier brings the products to the organization setting, then the best way is to have trustworthy
associations that ensure for no delay. Finally, it is important to consider the social responsibility
that the business plays to its stakeholders during the process of supply. Most work towards
reducing traffic, pollution and other inconveniences in the social environment.
Purchasing Cost Analysis
The process of acquiring goods from one business to the other involves a lot of expenditure from
the time they are obtained from the seller, taken to the buyer and finally used as intended. For
retailers like Lucky Plaza, the goods are finally considered purchased from the supplier if they
get to the shops and start selling with less or no interference (Weele, 2009). An organization
should, therefore, calculate all the costs incurred to ensure that they keep their profit-making

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plans in check. A business can only provide for maximum benefits if they cut on expenditure and
increase their incomes in all of their activities
The primary costs involved begin with the actual purchase price of products from the supplier.
The cost should put into consideration all the activities that will include more spending before
selling a particular product to the consumer. The buying price increases with the expenditure on
transporting, warehousing or storage, taxation, and delivery to customers (GCR, 2004). If all
these costs happen to be higher than the selling price, then the business will be making a loss. It
is therefore important to purchase from the suppliers who give better offers and discounts for
maximum profits. When it comes to transportation, the most important thing to put into
consideration is ensure that the modes used are the most efficient in consideration to their
availability, dependability, and cost. If transporting heavy goods for longer distances, a plane
might be faster but cannot carry in bulk, and it is expensive too (David, 2004). The best
transportation channel, in this case, will be either train or water. On the other hand, short distance
operations can utilize the cheap and reliable road transportation modes.
Delivery is another issue that requires a little expenditure before the buyer receives the purchased
products. Depending on the selling organization, the delivery costs vary depending on the
product and amounts delivered. Storage is a basic necessity in the operation of an organization,
and it is also considered under the purchasing cost. Once the goods arrive at the destination, then
they must be stored well before selling them to the final consumer. Depending on the nature of
products, then the storage spaces changes accordingly (Boardman, 2008). Fresh and perishable
items might require controlled temperatures and spacious rooms to ensure that they stay for as
long as needed. Accessories also need a particular manner of storage to ensure for safety.
However, items like clothing can take up less space since they can be squeezed without causing

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damage to the product. There are other products that require large-scale warehousing facilities
that are costly to the organization.
It is, therefore, best for the business to invest in low-cost and efficient storage facilities that
ensure for safety and preservation of the products (Weele, 2009). The different ways of
preserving products largely depend on the availability, the quantities involved and expenses as
well. The cost of storage should be maximized to the extent that profits are increased.
ICT for Purchasing Operations
Information and communication technology plays a great role in the purchase of goods and
services from an individual organization. ICT promotes the interactions between different
organizations that are involved in the supply and purchase of goods. It is important to ensure that
there is efficient, accurate and fast information transfer between the parties involved (Lancelot,
2003). ICT requires the development of websites, applications and software are that facilitate the
efficient supply of products.
In every purchase activity, the parties involved have to be connected in such a way those they
can freely interact with less or no distractions. Technology has played a great role in the
purchasing and selling between any business organizations (DiPietro, 2010). The retail business
ensures that they can get in touch with the supply companies via the internet and plan before
activities of operations. Terms and conditions of a business activity are also laid out well in the
websites and business profiles over the web. The social media is a platform that facilitates the
activities of advertising, ordering, and delivery. For a complete supply process, there is a need to
ensure that all the required information about a particular product is displayed.

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There are new applications and software’s that have been formed over the past years to ensure
that purchasing is done most efficiently. These applications are a way of publicizing the supplies
involved to increased demand in the market (Dubois, 2005). The retail business, therefore, tries
it’s best to look through the system and acquire a contract with the most recommended company
or source of raw materials. It is better to listen to the views of several people before forming a
working relationship with a company. The organization uses social media to negotiate prices and
quantity to ease the work of delivery and bargain on the ground (Scholl, 2012). It is therefore
important for an organization to ensure that they select the best strategies of purchase. They
should adopt the technological changes that are meant to make the procedure better and more
efficient in the long run. In as much as it is necessary, quality and efficiency matter most in a
business interaction. The companies should maintain the highest communication strategies to
ensure for learning appropriate supply.
Conclusion
In conclusion, all the strategies discussed above are in one way or the other influential to the way
an individual business conducts its activities. Cost influences the success or failure of an
organization and must be carefully strategized to come up with the best solution. I would
recommend for the retailer to ensure that all the purchasing strategies are of a positive influence
to facilitate for higher profit making. All the costs involved in the process must remain lower
than the selling price and use the internet and system to access such information is the best way.

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References
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analytic hierarchy process approaches. Supply Chain Management:. An International Journal ,
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Boardman, A. E. (2008). Cost-benefit analysis. Pearson.
Boran, F. E. (2009). A multi-criteria intuitionistic fuzzy group decision making for supplier
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Choi, T. Y. (2006). An exploration of supplier selection practices across the supply chain. .
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David, R. J. (2004). A systematic assessment of the empirical support for transaction cost
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external networks. . In Proceedings of the 21st Annual IMP Conference , (pp. 0-11).
GCR, N. (2004). Cost analysis of inadequate interoperability in the US capital facilities
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