How Supply Chain Intelligence Helps Organizations Tackle Increased Global Complexity



Abstract

Supply chain management receives major attention from many years. So strategic purchasing is also an important part of the supply chain concept. This paper reviews the importance of supply chain management and logistics strategies adopted by the purchasing organization, environmental trends faced by the public and private sectors, different issues faced by the organization, importance of internal and external partnership.

Introduction1

Importance of strategic purchasing1

Issues face in strategic purchasing2

Environmental Trends and Issues face by the Organisation2

Pro-active Role of Strategic Purchasing4

Supplier Optimization4

Effective Steps for Success in Purchasing Strategies5

Cross functional Process5

Organizational Structure and its Measurement System6

Evolving Concepts of Supply chain Management6

Supply Chain Strategies Support the Marketing and Production Department7

EDI10

Role of Empowerment10

Purchasing Strategy13

Total Cost of Ownership13

Purchasing Strategy for Third Party Logistics14

Trends in International Purchasing and factors consider by the purchasing organization16

Responsibilities of purchasing Department17

Ethical Responsibility17

References19

How Supply Chain Intelligence helps organizations tackle increased Global Complexity

Introduction

Strategic purchasing is the collaborative partnership between buyer and seller so that both can enjoy its benefits. Proactive long-term relationship is required for managing the strategic purchasing. For this purpose, both buyer and seller have to increase their boundary spanning activities. Formal communication and share of knowledge brought both together. Regularly scheduled meetings, cross functional teams, conferences etc are required for their engagement towards both. Thus, a need for socialization process is needed for strategic purchasing. Coordination between both parties is necessary for strategic purchasing.

Importance of strategic purchasing

Strategic purchasing is the most important function for the success of any firm. In this way firm can evaluate the supplier which in turn not only increase the performance of the supplier but also create the better understanding between them. Firm's financial performance shows an excellent result if the firms create a strategic purchasing relationship with its suppliers. Firm can be able to build sustainable competitive advantage which can enable the firm to work with the limited number of quality suppliers, open communication between both parties and to enjoy the mutual benefit between them. Both parties trust on each other and strong commitment is build between them. Many firms have argued that an organization enjoy much benefits if they do a large number of business with a small number of suppliers by using long term contracts. Suppliers become a part of the management which increases the competitiveness of the entire supply chain management.

Issues face in strategic purchasing

Although strategic purchasing is not a new strategy but still there are some issues faced by the organization when it form strategic relationship with its vendor. Company maintain a relationship with few suppliers so if vendors disobey firms order, not provide order on time, take a large delivery time, or not capable of providing quality products, then company finds hard to main strong purchasing relationship with other suppliers.

Environmental Trends and Issues face by the Organisation

Advancement in Technology

Technology is on advancement period and continuously increasing day by day. Modern technology should have to be employed if an organization needs relevant, cost effective and compatible ...