Supply Chain and Management
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Table of Contents
- Introduction……………………………………………………… 3
- Background/Problem statement……………………………………6
- Methods…………………………………………………………….8
- Analysis and Results………………………………………………..9
- Recommendations and Conclusion………………………………….11
Introduction
The supply chain is a broad process that comprises several components, which include purchasing, production, inventory management, planning, returning of goods, transport, and customer engagement. To have a chain of supply be reliable and efficient, all the above components have to associate with one another profoundly and even depend on one another. As explained by Hugos, supply chain chains are like the backbone of any business, which helps companies to grow and thrive. “Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play in each of them.” (Hugos, 2018, p.4)He further adds that the corporate that develops a reliable supply chain has a better chance in business as compared to its counterparts.”Those companies that learn how to build and participate in reliable supply chains will have a substantial competitive advantage in their market.” (Hugos, 2018, p.4) this competitive advantage makes a company stand out amongst its rivals in the business field.
My choice of an operational supply chain area is the area of Purchase. The reason why I chose this supply chain area was that it is very crucial to any company. This chain supply area ensures that the much-needed material and resources required in product creation are provided, thus enabling the upkeep of input or remedies available to ensure a steady output flow too. The primary aims of purchasing are usually based on the standard and usefulness of a company’s goods, lessening money caught up in the inventory, maintaining input flow to ensure output flow, strengthen the organization’s competitive specifications. Receipts and processing of Purchase may also involve development and product review specification questions, promotions, bidding assessment, and inspecting the company’s contracts of supply of the received goods and their safety during their storage and delivery.
The more international a country’s economy grows, the more enthusiastic these chances get. Based on the type of product that is manufactured and sold, customers can be involved in purchasing anything from books, stationeries, canned food, spare parts, e.t.c. “Supply chains today operate in a world where the rate of change continues to increase. As we enter an era that some have termed (The New Industrial Revolution), there is a need to develop supply chain solutions that are flexible and capable of adapting quickly to changes in the business environment. (Christopher, 2016, p.1)
Through my observation of several companies and organizations over many years, there has been a demonstration that the purchasing process can be affected, thus resulting in bottlenecks and other significant issues.
Among the critical issues identified under purchasing have to do with the retailer or brand stipulations, personal relationships, lack of proper contracts, over-emphasis on the price of a particular product, imperfect administrative process, problems connected to the delivery of the product and lastly decentralized Purchase. Under issues that have to do with retailer or brand stipulations, the user who may be an innovation guru determines the requirements. The specifications are outlined for one particular retailer severely restrict the customer’s purchase attitude, mostly based on exchange with the retailer who is mostly very well conscious of her goods. Acknowledging or being well aware of the technological prowess of a retailer is very important as it may also result in a situation whereby the supplier that has been chosen can hardly meet the magnitude and diplomatic requirements of the corporation. Regarding the selection of the retailer, I have realized that choosing the right supplier is the most crucial decision during the Purchase, especially if the products transported require a lot of time to preserve and recondition. Mistakes made in the selection of the right retailer can produce appalling outcomes such as an unexpected debt and the attorney’s lack of meeting standards or reluctance on his/her part to keep up with warranty rules.
Under personal relations, which are another critical issue in purchasing, we tend to find that purchases made as a result of the close connection between the customer and the retailer. As a result, long relationships may exist between organizations, and in the end, such retailers may fail to be as ambitious as the central buyers presume them to be. Under lack of proper contract agreements, i.e., when accessible contrasts are stated in everyday items as they may be incomplete, have not been legally scrutinized, or maybe missing a vivid explanation of the product or retailer needs.
Too much emphasis on the price is another critical issue, especially when buying capital goods. Therefore, choices should be made regarding the total cost of the amount only. Surprisingly, most processors, e.g., those of computer printers, have put in place a vending method where they charge a meager amount for their goods. On the other hand, however, their expiry terms and utility agreements require the buyer to purchase spare parts and preserving services from the original equipment manufacturer, also referred to as ( OEM). To manage this purchase method efficiently, customers need to make their choices regarding TCO models whereby the previous procurement of the item .is compared to the living expenses of the product.
Under inadequate regulatory procedures, sometimes, the retailer may have transported the goods. Secondly, the sales department requests for a sales order. The sales order should have an order number to be handed to the retailer for payments to be processed. Another regulatory problem can be that bills usually paid for without correctly going hand in hand with the authentic order number and documents transported with it. Incorporating an efficient organizational system could help save a lot of wasted money significantly as every single coin’s whereabouts would be recorded.
Background
Among the significant issues, I identified in the company I was working for having to do with delivery problems whereby, unfortunately, effects occurred during the delivery process. Examples of issues that happened under the delivery process were such as late delivery by the suppliers, incomplete delivery, and damaged products or products that failed to meet quality standards. Other issues included the unsound style of packaging, and labels on the item that outline every data about it were not recognized using the bar code systems. One of the causing factors of these critical issues can is vague stipulations or poor choice and assessment of the supplier. Another matter related to the delivery of product problems is the lack of a clear or unsuccessful follow-up plan for damaged goods.
One final major issue I also noted in my company was decentralized purchasing mode due to the failure of following or sticking by an effective purchasing protocol by employees. Decentralized purchasing occurs typically when an employee lacks access to a purchase protocol that enables them to acquire what they need fast. Therefore, employees end up purchasing items themselves and then expensing them or convincing somebody to loan them a company credit card to perform a purchase. Having identified this vital issue, I had to take into consideration how I can contribute to the company by solving a problem or some of the critical issues identified. Among the problems, I can provide solutions to include decentralized purchasing and matters relating to the poor delivery of products. Under effects on poor delivery of products that have to do with purchasing damaged goods or products that never arrived, I never noticed there was a lack of a clear follow-up plan for damaged goods or undelivered products. Hence, to solve the Problem, I insisted that my company ensures it properly updates and keeps its records to avoid my company being held liable for damaged goods or undelivered goods. For this reason, too, I also came up with a software named Purchase Mall, whereby one can add transportation and delivery information to the purchasing workflow and match it to the authentic purchasing document. This feature means that the finance will then be aware only to pay for products if they arrived while complete, and therefore the buyer can do a follow up with the vendor having full knowledge of the goods that came.
Through the development of this application, there have been reduced cases of complaints to do with delivery and loss of relevant documents to follow up a product with the vendor as Purchase Mall) comprises of a feature where the client could directly follow up and message the vendor directly. Purchase Mall has helped in the reduction of making wrong purchases, due to the availability of the section where reviews are given by clients who purchased products and their thoughts regarding the real and delivered product. Through this technique, a customer may either be convinced to buy the product or altogether avoid it based on the negative reviews made on a particular product.
Regarding the issue of decentralized purchasing in my company, it was time to assess and refine the company’s purchasing protocol. To provide a helpful solution to this Problem, I suggested that the company adopts a company-wide purchasing process that allows all employees to request and receive what they needed in urgency while sticking to the purchasing requirements. I also stressed that the company’s request workflow be easily accessible to all the employees. Easy accessibility will enable employees to simply fill in to push for fast approvals, failure to which employees will continue to discover ways to avoid the centralized purchasing process, thus getting stuck with colleagues who disobey the purchasing protocol.
Purchase Mall has helped a lot because it allows every employee to request for items quickly and speeds up the approval process.
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Methods
I used a couple of ways to come up with the data I had compiled above. Among the techniques I used included observation of the company at the surface level, interviews with some of the employees and some of the clients who had purchased in the previous year, issuing out questionnaires and surveys to my colleagues and lastly I went through some of the company’s old documents and records. Under the observation method, I conducted an observation of the company for two months. I came across some of the key issues listed above, for instance, the practice of decentralized purchasing and the lack of the right contractual arrangement. An employee or the permission to a purchasing protocol that enables them to get that which they require fast attributes the decentralized purchasing method to the lack of following an effective purchasing protocol and the lack of visibility. On the issue of lack of good contractual plans, which repeatedly occurs whenever contracts are general, incomplete, and fail to pass legal scrutiny. Another reason that may lead to the lack of good contractual agreement is if the supplier drafted the contract on its legal terms.
In another instance, I also compiled some simple questions, which were both multiple-choice questions and direct answer questions. I then issued some questionnaires to my colleagues at the company and received a lot of negative feedback regarding some practices in the company. Among the key issues, I learned of through the questionnaire were poor administrative processes, problems relating to the supplier or brand specifications, and inadequate supplier selection. Under poor executive behaviors and practices, there was the issue of paid invoices without proper/ authentic delivery documents. Regarding the matter of brand specifications, which was reported by a large number of employees, I learned that the use of a specific supplier restricts the customer’s commercial interest in terms of negotiations.
The final method I used to gather data was through studying old documents and records belonging to the company through which I came across one of the critical issues. That is, over-emphasis on the price whereby the item is sold at a relatively low cost, after which the customer has to purchase spare parts and other types of preservation aids from the Original Equipment Manufacturer (OEM).
Analysis and Results
On the critical issues of decentralized employees purchase and problems related to the delivery of the product, I managed to come up with several solutions to help fix or reduce the above issues. Under decentralized Purchase, I pushed for my company to access and refine the company’s purchasing protocol. On analyzing the solutions I provided, I have come across a lot of positive feedback. Among the alternatives I offered included scrapping off the previous company’s purchasing protocol and coming up with a new company is purchasing contract that champions for centralized shopping. I also came up with a mobile app to ease problems connected to buy, and it has recorded excellent results even concerning decentralized purchasing within the company. Purchase Mall, which is my innovation, has helped a lot as it allows for the employee to request for items quickly and speeds up the process approval. Regarding the critical issue of delivery, problem measures have also been put in place to ensure the safe delivery of products.
Decision-making process
In my decision-making process, I went through a series of events before finally deciding to settle on one final decision. I began by first identifying the key issues or problems in my company and noted them down. I made sure that my defined decision was measurable and timely to achieve the goal of solving the problems identified.
The first step in my decision-making process involved reviewing my decision and asking myself questions such as: Did I solve the Problem? Did I answer the question? Moreover, Did I meet my goal? After answering these questions, I took note of that which worked for future reference and learned lessons from some of the mistakes might have committed unknowingly. Secondly, I gathered all the relevant information that I could get. In that effect, I carried out an internal assessment to verify whether my company had succeeded or failed in the past few years in the area of Purchase. I also took advantage of external sources, which included issuing out some questionnaires, interviewing some clients and employees, and incorporated observation techniques to note some of the critical issues faced by the company. The third step in my decision-making process included identifying alternatives. With the vital information, all gathered, I took my time to identify possible solutions to the problems I discovered in step 1. I found that the alternatives helped reduce and put an end to problems of delivery of products and decentralized Purchase. I then weighed the evidence against the other options I had put into consideration. Studying the company’s old documents, I learned how our company wins or loses. Therefore, I identified potential pitfalls for each of the alternatives that I had put into consideration.
In the fifth step of my decision-making process, I sat down and chose among the options I had put into account. Having identified and clarified what the final choice had to be and put together all critical knowledge and later on considered potential solutions, I was entirely ready to choose. The moment I had determined the final alternative, I acted upon it and, therefore, came up with a plan to make my decision stable. I then developed a project plan related to my decision and then set my colleagues free on their tasks once the idea was in place.
Recommendations and conclusion
In this study, we have identified critical issues within the supply chain in the supply area of Purchase. Among the essential items noted were decentralized Purchase and problems related to the delivery or transportation of products and other services. Among the other matters noted included over-emphasis on the price of certain products and goods, retailing or narrowing down to only a specific brand, lack of close relations, lack of proper contract stipulations, and inadequate regulatory processes.
Based on the above-outlined problems, I would recommend that companies adapt to a refined protocol of purchasing further referred to as centralized purchasing to avoid wastage of the company’s finances. Companies should most certainly ensure they are dealing with the right kind of contractor to ensure safe product transportation and delivery to the customers to build customer trust and build a personal relationship between the two for the better of the company. Companies should also restrict brand specification and over-emphasis of prices of individual products entirely. They should intentionally avoid deducting the maintenance and service fee of a product hence lowering the item’s price way beyond. Once the company has incorporated the above recommendations, it will be assured of growth and the maintenance of an efficient supply chain.
References
Christopher, M. (2016). Logistics & supply chain management. Pearson UK
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
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