Purchasing/Supply Management Report: Business Development Insights

This report provides a comprehensive overview of purchasing and supply management, emphasizing its crucial role in business operations and cost reduction. It analyzes various aspects, including the structure of purchasing/supply management functions, strategic decision-making, and key issues. The report explores the evolution of this function, its impact on e-commerce, and future trends. Case studies of companies like Dell, Waterstones, Amazon, and Tesco are examined to illustrate real-world applications and supply chain strategies. The report also discusses funding options for SMEs, the adoption of new technologies, and the importance of effective inventory management. Overall, the document offers valuable insights for business development, covering topics from strategic decision-making to the adoption of new technologies.

Purchasing/Supply Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
SESSION 2......................................................................................................................................2
Task 1..........................................................................................................................................2
TASK 2.......................................................................................................................................4
SESSION 5......................................................................................................................................4
Task 1..........................................................................................................................................4
Task 2..........................................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................5
.........................................................................................................................................................5

INTRODUCTION
Purchase and supply management play crucial role in procurement and monitoring of
goods. It also involve activities like negotiation with suppliers or wholesalers which can help an
organisation in reducing overall cost of production.
TASK 1
(1) Size of firm – 101800
(2) Sector – Computer hardware and software
(3) Nature of business – Technical support and Sell Laptop
(4) Number of employee in Purchase/supply management – Around 35000
(5) Years of commencement of business – 1984
(6) Structure of purchase/supply management function – Normally in business of
technology an organisation first find a supplier so they can make personal computers. After this
they look for distributors who can take their product in market by finding retailers or resellers. At
the end goods reach to their final customers. Dell has a simple structure for purchase and supply
management, they buy raw material from supplier and process them in finished item. They
directly sell their commodities to end users (Barney, 2012). Their are three levels in organisation,
first is strategic who main broad policy, second is analytical who examine the whole process and
last is operational who execute decided strategies.
(7) P/S management function input in strategic decision – It assist in reducing cost of
operation by using effective approaches like Just-In-Time. They keep their inventory for 6 days
in warehouse which cut down labour, maintenance other costs. They started avoiding use of
outdated technology which gave them extra edge on their competitors. They sell their product
directly to their final customers which is the main reason of high profit margin.
(8) Main issue in P/S management function – Their are two main issues, first is that
supplier do not maintain the quality of raw material which companies need in order to make
desired product. In initial period they deliver goods according to their promise but after after
sometime they start breaking their commitments. Organisation's are failing to find skilled
workers who have deep knowledge of the work. Retention of workers is another issue, an
enterprise may give training to new employee but they work in firm for a long time.
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(9) Change in role of P/S management in last five year – Earlier this activity were not
considered in the core function performed by an organisation but now they customer what order
item in less time period and they are ready to pay more money for it. This trend enhanced profits
of many companies. Emergence of online shopping sites like Amazon played crucial role in
increasing the importance of purchase/sale management function.
(10) Future of P/S management activities – Their importance is going to increase in
upcoming time because nowadays customers prefer buying goods online. Trend of purchasing
commodities is going down, people do not have time to visit outlet which are present in corner of
roads or in malls. This sector will generate more jobs in future so demand of skilled and
experienced workers will also enhance. Technology will provide special assistance in performing
various tasks related to purchase and supplying function.
(11) Role of purchasing in modern organisations – In this era, companies focus on only
two things. First is increasing their overall sale and second in reducing their cost of production.
These two strategies are significant for earning more profit (Monczka And et.al ., 2015). If
procurement department of an enterprise buy quality goods in less price than an organisation can
get some extra edge over their competitors. With time, importance of purchase wing is increasing
and they are becoming hey players in enhancing revenue of company.
SESSION 2
Task 1
In Waterstones, author bring his/her book to publisher so they can read and take decision
relating to its publication. Sometime a writer can involve an agent because he/she may not have
enough connections with publishing houses. After this, publisher sell this book to wholesalers
and distributors who trade them through internet, bookshops or from book clubs. At the end of
this procedure, work of writer reaches in front of end users. Amazon on the other hand has
adopted completely different supply chain. When a customer order an item, Amazon provide
their order to their registered suppliers. FedEx is partner of Amazon, they play crucial role in
supply chain management because they handle their complete business of logistics. They take the
product from supplier and deliver it in the hand of customer.
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The methods adopted by Amazon is very effective because it is simple and it do not involve huge
cost. Timely deliver of product can be done by this approach, FedEx is leading company in
business of logistics so they can handle complete supply chain of Amazon. This supply chain
also has some major disadvantages, a company has to depend on other firm who have power to
derail complete business of an organisation. If an enterprise make mistake in selecting good
partner than they have to face its consequences for long period of time.
TASK 2
Bruynzeel Keukens need to redesign their supply chain because their current strategies is
not fitting in this era. They are working on their old model which keep their focus on customers.
They strategy of mass customisation will not work in current business scenario because it their
competitors are executing effective ways for managing purchase/supply chain. They can adopt
ABC method which is based on the rule of 80/20. Items can be divided into three category i.e
A,B,C. In 'A' group, they keep those product who earn most of the revenue for the organisation.
Company should keep tight control on these products. In 'B' category, they have to selected those
goods which has decent demand and their cost of maintenance is also normal. 'C' group is for
those items which do not add much amount in profit and enterprise need simple control on this
section (Giunipero, Hooker and Denslow., 2012). In general, 20% of products earn almost 80%
revenue for the organisation and 80% of commodities bring 20% of revenue in firm.
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SESSION 5
Task 1
Tesco is a leading company in retail sector and recently they started their online store
where customers can buy all the product which is available in their outlets. This decision will
provide for lot benefits to the organisation which are as follows:
Increase in market – Their are some areas where cited firm do not have many physical
stores, this step will expand their customer database which will assist them in increasing their
overall revenue.
Reduction in cost of operation – Tesco do not need to employ more employees in their
outlets because online shopping will decrease consumer footfall. They do not need to occur
money on opening of new retail stores which will reduce their expenditure on fixed investment.
This step will help them in reducing the burden of debt.
Adaption of new tech. - Technology play crucial role in success of a company in this era.
If cited enterprise will use updated techniques of selling like e-commerce than it will increase
their importance in industry (Schoenherr and et.al ., 2012).
Task 2
SMEs and E-commerce
An SME in Northern Ireland has various option to get funding for their business. Local
government department made a regional growth fund which is available for small business
enterprises. According to expected record, private firm has put around 16 billion pound in this
fund in last 7 years. In other scheme, government is agree to guarantee 75% of bank loan taken
by SMEs and lender will cover remaining 25%. Most of the schemes are for start-up who are
doing their business by using and working on technology. These new business enterprises need
initial capital so they can get basic facilities which are essential for doing business like land,
workforce, working capital. In order to avail advantages of these plan small and medium
enterprises has to fulfil some demand which is essential (Large and Thomsen, 2011). Their are
exception of these schemes which are available on in special cases.
CONCLUSION
From the above report it can be concluded that purchase and supply management
function play crucial role in success or failure of an organisation. With time, their importance in
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organisational activities is also increasing because they have capacity to reduce operational cost
of a firm.
REFERENCES
Books and Journals
Barney, J.B., 2012. Purchasing, supply chain management and sustained competitive advantage:
The relevance of resource‐based theory. Journal of supply chain management, 48(2).
pp.3-6.
Monczka, R.M. And et.al ., 2015. Purchasing and supply chain management. Cengage Learning.
Giunipero, L.C., Hooker, R.E. and Denslow, D., 2012. Purchasing and supply management
sustainability: Drivers and barriers. Journal of Purchasing and Supply
Management, 18(4). pp.258-269.
Schoenherr, T., and et.al ., 2012. Research opportunities in purchasing and supply
management. International Journal of Production Research, 50(16). pp.4556-4579.
Large, R.O. and Thomsen, C.G., 2011. Drivers of green supply management performance:
Evidence from Germany. Journal of Purchasing and Supply Management, 17(3).
pp.176-184.
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