keim dwayme
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Report Thread starter 1 month ago
own essay. ( 3 sentences each )

1) Explain how complex and full of challenges global supply chains operations are.

2) Articulate how collaboration affects the of supply chain management.

3) Explain the importnce of procurement function in supply chain management.

4) Discuss the goal of procurement in an organization.
Crown Tutor
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Report 2 weeks ago

The first question is a little vague but let's give it a go anyway.

1) A complex and full of challenges global supply chain operations could be the automotive industry for example, where the parts are made by hundreds of different suppliers (e.g. seats, gear box, seals, nuts, glass, pistons etc) and made in different countries.
a) These parts require rigorous quality control, i.e. if the two parts in the engine that connect together have an even 1mm of error, they will not fit and could halt production or worse cause breakdown and safety issues for the end customer.
b) The automotive factory requires co-ordination so that the right parts are ordered, then hundreds of suppliers need to ensure that the parts are made and delivered on time. When they arrive in the factory, they need to go to the right place (as the factories stretch for miles).
c) Suppliers need to organise the logistics (delivery of items through courier companies), the delivery trucks need to pick up supplies from one country, cargo them to another country, then organise road delivery to the factory. All of this needs heavy planning and co-ordination.

2) Collaboration between the suppliers and the customers (automotive factory in our case) has proved vital in recent years. Previously parts used to arrive in the factory, sit in the warehouse, somebody would sort them and bring them to the car assembly line. Nowadays, the exact part is delivered by the supplier to the assembly line precisely at the point in time when it needs to be fitted. This is also known as JIT but super refined. This saves money on the warehouse. However, look at the amount of collaboration it must require whereby the supplier knows that you need a 17" wheel and not an 18" inch wheel for the car that is going to be on the assembly line at say 20/Nov at 2.30pm.

3) Procurement department is like having Mommy do all the shopping. Why? because she knows how to negotiate the best price.
Instead of allowing each department to buy their own supplies, i.e. somebody is buying a pen from Staples, somebody is buying a desk from furniture store, somebody is buying steering wheel from a random place, others buying windshield from another place. Everybody lists what they want and the procurement department buys it for them. The benefit is that they will go to one supplier for stationary, one suppliers for furniture, one suppliers for steering wheel etc. Therefore, since they buy in bulk, they get a better price. Also they are better negotiators so they get a good price anyway. They also sign contracts so that the quality supplied is satisfactory.

4) Goal of procurement is to get the best quality at the cheapest price, reliable and consist supplies. Save the company money, constantly look for cheaper suppliers and shop around for better quality.

Hope this gives you some foundation in the topic.

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