PROCUREMENT

Essay on Procurement for CIPS Certificate

Executive Summary

Supply chain management is not limited to distribution and logistics only; as from the name suggests, it is a whole domain of different operations involved and engaged together. The ultimate goal of SCM is the cost reduction and to integrate the network chain. The value chain is not limited to suppliers and manufacturers, it also involves transporters, retailers, warehousing and in the end benefiting the customers. It's an operation which bounds all the departments together in a single chain called “Supply Chain”. The supply flexibility at the Maersk Oil implies that it react positively to the market demands and towards the uncertainty of the environmental factors. It is also seen as the response of the company towards the market competition and the ways of managing that competition. The supply chain flexibility at the Maersk Oil makes the oil and gas products more attractive for the customers and increases the sales by adding value in the eyes of customers. The purpose of this paper is to discuss the Supply Chain Management and Procurement practices of Maersks Oil. The paper is divided into three questions.

Table of Contents

Executive Summary1

Question 13

Question 211

Question 315

References18

Essay on procurement for CIPS certificate

Question 1

Supply chain management “represents the philosophy of managing technology and processes in such a way that the enterprise optimizes the delivery of goods, services and information. Supply chain management has increasingly become a strategic necessity for corporations. In recent years the validity and necessity of a robust and effective supply chain methodology has become evident with announcements of major schedule delays by aerospace corporations due to unknown and unforeseen supplier and internal inefficiencies and unacceptable performance. All leverage and cost gains are being lost in alternate work strategies driven by schedule delays and the demands of customers or consideration. Supply chain management has roots in the focus on lean and efficient manufacturing. These lean efficiencies were driven by corporations initiating cost saving changes to the business process. Supply chain management is seen as a process-driven approach to streamlining the business. High-tech industries streamline by moving facilities closer to the customer, automotive manufactures developed just-in-time delivery, while the consumer industry achieves supply chain efficiencies through demand driven networking (Pagh 2009, pp. 3).

Understanding the market and developing the appropriate supply chain best practices increases stability at the same time it decreases risk and associated costs. Increasingly business is looking for “leaner” efficiencies outside of the expected manufacturing environment. The entire business structure is under review, specifically interactions with customers and suppliers, in short the supply chain.

For the last three decades, supply chain related strategies have been on the increase in aerospace corporations. While methods and procurement strategies for outsourcing non-core competencies have increased and improved procurement strategies, this has not been paralleled in supply chain management. Improving the performance of the supply chain requires that the organization increase its sphere of influence over the functions along the supply chain. Supply chain management has at times been referred to as “logistics”; ...