...Purchasing management is the critical business function to every organization as no organization can exist without suppliers’ support. Traditionally, purchasing was viewed as a clerical activity that only did some documental work required by other departments. There was usually no communication between purchasing and other departments within the organization. Also, suppliers were usually selected based on price and availability only. However, purchasing management has undergone a great change since 1960s. Organizations began to realize that purchasing can become a profit-making activity rather than just a profit-taking activity. A study performed by Carr and Pearson (2002) shows that purchasing management has a positive impact on the organization’s financial performance, no matter the firm is small or large in scale. It always plays a major role in the organization’s efforts to improve the quality of products and, in turn, market share. An effective purchasing management can improve the overall productivity, profitability, and return on investment of an organization. Therefore, in modern organizations, purchasing is viewed as a vital element in gaining competitive advantage. Coordination with other departments, such as marketing, production and financial, was augmented. Purchasing professionals nowadays are required to work across functional boundaries, for example, working with the production department to plan the schedule for goods acquired and delivered. More importantly...
Words: 1106 - Pages: 5
...Purchasing and Supply Management Key points and terms Chapter 1 Supply chain management: "The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer. The development and integration of people and technological resources are critical to successful supply chain integration." (ISM definition, www.ism.ws) Purchasing, supply management, and procurement: are used interchangeably to refer to the integration of related functions to provide effective and efficient materials and services to the organization Supply management: the identification, acquisition, access, positioning and management of resources the organization needs or potentially needs in the attainment of its strategic objectives Lean purchasing or lean supply management: refers primarily to a manufacturing context and the implementation of just-in-time (JIT) tools and techniques to ensure every step in the supply process adds value, that inventories are kept at a minimum level, and that distances and delays between process steps are kept as short as possible. Logistics management: According to the Council of Supply Chain Management Professionals, "Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet...
Words: 422 - Pages: 2
...edition of Purchasing and Supply Management focuses on decision making throughout the supply chain. Based on the conviction that supply managers, in concert with suppliers and distributors, have to contribute to organizational goals and strategies, this edition continues to focus on how to make that mission a reality. Fourteenth Edition Highlights of the Fourteenth Edition: More than 40 real-life supply chain cases afford the opportunity to apply of the acquisition process. Criteria for supply decisions have been organized into three categories: (1) strategic, (2) operational, and (3) additional. In this third category, new factors such as balance sheet and income statement considerations, dimensions of risk, and environmental and social considerations are considered. Visit the text’s Online Learning Center at www.mhhe.com/Johnson14e Michiel R. Leenders, D.B.A., PMAC Fellow Professor of Purchasing Management Emeritus Richard Ivey School of Business The University of Western Ontario Anna E. Flynn, Ph.D., C.P.M. Formerly Clinical Associate Professor Supply Chain Management Thunderbird School of Global Management Formerly Associate Professor Institute for Supply Management TM Johnson Leenders Flynn Purchasing and Supply Management Johnson Leenders Flynn MD DALIM #1093963 06/05/10 BLUE GREEN P. Fraser Johnson, Ph.D. Leenders Purchasing Management Association of Canada Chair Associate Professor, Operations Management Richard Ivey...
Words: 188430 - Pages: 754
...Research Paper David A. Horvath INF 336 – Project Procurement Management Beverly Williams May 9, 2011 Purchasing and supply management holds a position of great importance to the business world. Within purchasing and supply management, there are the steps of the creation of project supply, service, and material budget from detailed requirements. It shows how to select the most qualified suppliers and strategies for negotiating prices. Along with this, there are also benefits and costs of outsourcing. This includes the growth of outsourcing. Various organizations will be evaluated on their benchmarks in purchasing and supply management, along with their best practices in this. There are specific companies out there that who show market leadership in purchasing and supply management. The term, “purchasing,” is often limited to what its actual definition is. It is limited to just buying and this refers to the location and selection of suppliers, learning of the need for whatever it is to be bought, price negotiation and any terms of agreement, and finally, the payment and delivery. In this particular case it is something much bigger this is not the definition that should be used for it. “Purchasing, supply management, and procurement are used interchangeably to refer to the integration of related functions to provide effective and efficient materials and services to the organization. Thus, purchasing or supply management is not only concerned with the standard steps in the procurement...
Words: 2436 - Pages: 10
...•Relationships between manufacturers and suppliers (How changes involved over time overall business industry) Partnerships can be segmented into three tiers based on the intensity and duration of the relationship: 1. Tier I •Short-term, single-function / division coordination 2. Tier II •Extend coordination to integration and encompass multiple activities over a longer time span 3. Tier III •Dilate into “significant” levels of operational integration •Independent” Tier III firms view their partners as difficult-to-replace extensions of themselves 11 •Supplier partnerships (Strength, benefit and risk of partnerships) Some benefits of a supplier partnership include Gains from higher quality Transaction costs may be reduced through: • Economies of scale •Decreased administrative and switching efforts •Process coordination / integration •Quantity discounts Risks of Supplier Partnerships Most importantly, heavy reliance on one partner can be disastrous if the partner does not meet expectations Risk decreased competitiveness due to loss of parental control Firms can overestimate partnership benefits while ignoring potential shortcomings What can be done differently? Partnership Implementation and Critical Success Factors Before firms can enjoy the benefits of partnership, they must first endure the complicated and intricate partnership implementation process Partnership involves significant attitudinal and structural change...
Words: 390 - Pages: 2
...ARTICLE IN PRESS Journal of Purchasing & Supply Management 15 (2009) 187–197 Contents lists available at ScienceDirect Journal of Purchasing & Supply Management journal homepage: www.elsevier.com/locate/pursup Supplier involvement in new product development and innovation: Taking stock and looking to the future Thomas E. Johnsen à Purchasing & Supply Management, Audencia Nantes School of Management, 8 route de la Joneliere, BP 31222—44312 Nantes Cedex 3, France a r t i c l e in fo Article history: Received 18 November 2008 Received in revised form 19 March 2009 Accepted 25 March 2009 Keywords: Supplier involvement New product development Supplier relationships abstract This paper provides a comprehensive and critical review and synthesis of the current state of empirical research into supplier involvement in new product development (NPD). The paper begins by defining supplier involvement in NPD and evaluating the rationale for supplier involvement in NPD. This suggests that early and extensive supplier involvement in NPD projects has the potential to improve NPD effectiveness and efficiency, however, existing research remains fragmented and empirical findings to date show conflicting results. The paper takes stock of the research on supplier involvement in NPD, tracing the origins of the literature to the late 1980s, and evaluating the development of the field up to the present day. From this broad base of empirical research the analysis identifies a set of factors...
Words: 8850 - Pages: 36
...examines purchasing and supply chain management in an organization. Over the years, the role of purchasing and supply chain in an organization has continued to evolved, changed, and developed in response to changes witnessed in business environment. The increasing numbers or world-class competitors in local and international trades are a direct driver of increase in purchasing and supply chain roles and demands. Many management scholars have defined the notion and significance of supply chain management in detail across the globe. Many times, theoretical definitions of what purchasing and supply is are provided. But This term paper will firstly, suggest that purchasing and supply chain management is a developing field that constantly changed based on happenings in business environment. And secondly, suggest that individual firms’ purchasing and supply chain is base on such firms’ type of business, size, and mission. Evolution of supply chain management. Supply chain management involves the management of all activities in order to satisfy the ultimate consumer. It covers almost all business activities, including marketing, manufacturing (or service provision) purchasing, logistics and arguably is an all-inclusive concept that create a world-class culture and continue economic development. (Quayle, Michael 2006) In a nutshell, purchasing and supply chain management is a series of interwoven activities that cut across every departments of on organization. Purchasing and supply...
Words: 2283 - Pages: 10
...Introduction With the development of business, we can easily find that the role of purchasing and supply management has become increasingly important. Over the past years, as a discipline, purchasing and supply management has largely changed many companies. The significance of supply chain management is mainly due to the large cost on supply chain. ()On average, fully 70% of a firm’s sales revenues are spent on supply chain-related activities from material purchases to the distribution and service of finished products on the final customer. Other than that, there are several factors resulting in the evolution of supply chain management. First of all, in order to gain more market share, it is vital for companies, especially for multinational companies, to focus on building stable and effective supply chain as each segment of supply chain are likely to influence the products or service of companies. Moreover, the development of communications and transportation technologies, such as mobile communication and Internet, have forced the evolution of supply chain management. The purpose of this essay is to explore the influence of supply chain management on companies. Also, both sustainability and risk management are crucial in supply chain management, Objectives Through journals, monographs and related theories and articles on the website of the search, organize and summarize, discussed the importance of the supply chain in the contemporary business. In addition, based on...
Words: 521 - Pages: 3
...1 Chapter One Chapter Outline Purchasing and Supply Management Supply Management Terminology Supply and Logistics The Size of the Organization’s Spend and Financial Signifi cance Supply Contribution The Operational versus Strategic Contribution of Supply The Direct and Indirect Contribution of Supply The Nature of the Organization Supply Qualifications and Associations Challenges Ahead Supply Chain Management Measurement Risk Management Sustainability Growth and Infl uence Effective Contribution to Organizational Success The Organization of This Text Conclusion Questions for Review and Discussion References Cases 1–1 Qmont Mining 1–2 Erica Carson 1–3 Southeastern University Purchasing and Supply Management 2 Purchasing and Supply Management Key Questions for the Supply Decision Maker Should we • Rethink how supply can contribute more effectively to organizational goals and strategies? • Try to find out what the organization’s total spend with suppliers really is? • Indentify opportunities for meaningful involvement in major corporate activities? How can we • Align our supply strategy with the organization’s strategy? • Get others to recognize the profit-leverage effect of purchasing/supply management? • Show how supply can affect our firm’s competitive position? Every organization needs suppliers. No organization can exist without suppliers. Therefore, the organization’s approach to suppliers, its acquisition processes and policies, and its relationships with...
Words: 12101 - Pages: 49
...and suppliers nowadays. The sourcing model of global apparel brands within its ethical purchasing and supply chain management functions have been critically analysed to evaluate their effectiveness and value they add throughout their supply chain and in overall organisational operation. This report has emphasised on three key areas such as general sourcing model and its components in the context of global buyer’s perspective i.e. Transnational Corporations, a clear scenario about current ethical situation of Bangladesh’s apparel sector, and relevant supply chain theories and its implications related to ethical purchasing in apparel industries. At the end, a proper conclusion has been given by evaluating all the three sections critically based on the theoretical lens of purchasing and supply chain management. Table of Contents Executive Summary 1 Introduction 3 Section-1: General Discussion on Sourcing and its Components 4 Sourcing and its Role in Supply Chain 4 Sourcing Needs of the Companies and its Impact on Supply Chain 4 Steps of Making Sourcing Decisions by Transnational Corporations 5 Ethical Sourcing 6 Ethical Sourcing by TNCs in Apparel Sector 6 Importance of being Ethical in Sourcing 8 Section-2: Current Situation of Bangladeshi Apparel Sector and its Ethical Perspectives 9 Section-3: Supply Chain Theories and its Implications Related to Ethical Purchasing in Apparel Industries 11 Theory of Value Chain and Global Value Chain 11 Corporate...
Words: 3979 - Pages: 16
...pag.: 1 van 13 code: LEV-PORT-art-013-bl Purchasing must become Supply management Bron: Auteur(s): Harvard Business Review, september-oktober 1983 Peter Kraljic Purchasing Must Become Supply Management Peter Kraljic Harvard Business Review No. 83509 SEPTEMBER–OCTOBER 1983 HBR Peter Kraljic Purchasing Must Become Supply Management The stable way of business life many corporate purchasing departments enjoy has been increasingly imperiled. Threats of resource depletion and raw materials scarcity, political turbulence and government intervention in supply markets, intensified competition, and accelerating technological change have ended the days of no surprises. As dozens of companies have already learned, supply and demand patterns can be upset virtually overnight. How can a company guard against disastrous sup- ply interruptions and cope with the changing economics and new opportunities brought on by new technologies? What capabilities will a profitable international business need to sustain itself in the face of strong protectionist pressures? Almost every kind of manufacturer will have to answer these questions. Some companies have already responded to the growing pressures. For example: o Finding that purchasing outlays had increased in less than one year from 40% to 70% of the cost of goods sold, one European office-equipment manufacturer began to rely more heavily on American and Japanese suppliers, revise its materials planning system...
Words: 5656 - Pages: 23
...Vehicle Information: 2008 VOLVO S40 2.4I VIN: YV1MS382582374634 SEDAN 4 DR 2.4L L5 PFI DOHC 20V FRONT WHEEL DRIVE Standard Equipment | Safety Options Very minor damage reported 3 Previous owners 9 Service records available Types of owners: Commercial, Personal 86,944 Last reported odometer reading $70 Below retail book value This CARFAX Vehicle History Report is based only on information supplied to CARFAX and available as of 10/1/13 at 1:21:51 PM (EDT). Other information about this vehicle, including problems, may not have been reported to CARFAX. Use this report as one important tool, along with a vehicle inspection and test drive, to make a better decision about your next used car. Price Calculator™ Adjust the value of this 2008 Volvo S40 2.4I based on the information available in this report 1) Retail Book Value 2) CARFAX Price Adjustment™ 3) Adjusted Retail Value Begin by entering the retail book value $ 0 - $70 Below retail book value Enter retail book value here Ownership History The number of owners is estimated Year purchased Type of owner Estimated length of ownership Owned in the following states/provinces Owner 1 2007 Commercial 2 yrs. 9 mo. Texas Owner 2 2010 Personal 1 yr. 11 mo. Texas Owner 3 2012 Personal 1 year Texas Owned in the following states/provinces Estimated miles driven per year Last reported odometer reading 23,597/yr 65,247 7,650/yr 83,534 --86,944 Title History CARFAX guarantees the information in...
Words: 1722 - Pages: 7
...could eventually become detrimental problems that could hinder the company if not addressed before substantial growth. Kudler foods face many issues that can eventually become problems, if not corrected. The goal of Kudler foods is to be a one stop shop with a reasonable price. The mission statement says that they shop the whole world for their products. The finest is what they guarantee their customers. One if the issues are in the process of purchasing “There is no purchasing department in any of the stores although standard purchasing procedures are in place” (Kudler Foods). The lack of a purchasing department within each store leaves room for theft by store managers and over ordering because of favors to venders. Unfortunately, if Kudler is leaving all of the purchasing to the managers except for bulk items, they are jeopardizing the integrity of the products and the company leaving it open for corruption. The solution would be to produce a purchasing department that would make purchases and verify the orders of the management and providing purchase orders to vendors. A new study suggests that nearly any worker may be willing to steal from an employer under some circumstances--unless the company makes clear that theft is unethical ”(Research news). The other alternative is to place more responsibilities of lost on the manager’s salary because a study at Ohio State University shows that, “nearly no employees were willing to steal if they thought the money came from the...
Words: 999 - Pages: 4
...offering more purchase decision choices. Consumers are paying more attention to the origin of products as part of their evaluation and purchasing decision process (Bhuian, 1997;Ettenson & Klien, 1998; Katsanis & Thakor,1997). Given that giant Myer wants to expand their business in Australian market in the next three years, the management team must identify right strategies such as possible new sources of revenue and new market segments, to increase the revenue coming from current sources. In order to differentiate itself in a highly competitive market as well as generate revenue in many ways, understanding the key target markets will be very important as well as establishing a clear vision as to which direction the company should head to in the future. 2. Problem Statement & Research Objectives 2.1 Background information A recent survey by the accounting firm BDO (2014) revealed that Australian retailers are growing revenue slower than their international peers. Myer, as one of the many other traditional Australian retailers, is lagging behind its competitors in key financial measures, such as revenue growth and target market. Furthermore, there is an increasing growing trend and demand for imported products to Australia in the past five years (appendix 1), which can be attributed to the country-of-origin effects. Therefore, the management problem comes out what strategy can we develop to increase sales revenue from exporting foreign products to Australia market? ...
Words: 2273 - Pages: 10
...Chapter 8 : Creating Brand Equity Resumed by : Kelvin Karnadi 201560115 Sharen Veronica 201560176 Analyzing Business Markets Organizational buying is the decision-making process by which formal organiztions establish the need to purchase products and services, then identify, evaluate, and choose among alternative brands and suppliers. The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others. Buying situations * straight re-buy : A purchasing situation where the buyer reorders the same products without researching or considering other suppliers * modified re-buy : A purchasing situation where the buyer's revisions to the order require additional analysis or research * new buy : A purchasing situation requiring the purchase of a product for the very first time. Participants in the business buying process The major participants in business buying process are * Initiators-are the ones who initiate or recognize the need of a particular product requirement in the organization for enhancement or to combat depravation. * Users-are the ones who are going to use the product or require it for the smooth functioning of their operations. * Influencers --Influencers can be of different levels and the decisions that they influence might differ from person to person or post to post. These are basically the people who will influence the decision of...
Words: 512 - Pages: 3
