Unit 2: Supply Chain Procurement
As we saw in Unit 1, there are many steps in the supply chain management process. However, nothing can be accomplished if an organization does not choose the right suppliers of goods and raw materials. There are several ways an organization can manage this process; the most prominent among those are "lean" and "agile". Lean focuses on reducing waste and identifies seven wastes that should be eliminated for a lower-cost and more efficient operation. Agile focuses on the need to be flexible and to be able to respond to rapid changes in the market or in customer demand.
Once an organization has determined the process for obtaining materials and resources, it must choose the suppliers that will best meet its needs. Some of the questions a company must ask of their suppliers will focus on quality, timing, and reliability. It is also important to implement good procurement practices, so there is consistency and efficiency throughout the process. This helps to identify hidden costs so that they can be addressed and eliminated. Organizations must find the strategy that is the best fit for their operations, and determine which method can best meet their needs and goals.
Completing this unit should take you approximately 1 hour.
Read this real-world study that was conducted to determine if a company could have lean supply chain management, while also having the agility needed for a small business to flourish. The relationship between a company and their suppliers is explored and is considered to be an essential factor in the supply chain management process.
Read this section to explore the importance of managing materials from vendors to the process of manufacturing. This section is important because it focuses on the activities of an operations manager while managing the production process. Pay particular attention to the question that you need to answer when choosing a best supplier.
This presentation at Johns Hopkins' Bloomberg School of Public Health provides information related to the procurement of pharmaceuticals. Pay particular attention to the good procurement practices, impact of hidden procurement costs, the models of regional/country collaboration, and the common procurement challenges.
After you review this unit, post and respond to this topic on the discussion forum.
Choosing suppliers for your supply chain is often a challenge. Do you put all your eggs in one basket or look to fulfill your needs through multiple vendors? Using the information provided over choosing a good supplier, apply the criteria to the purchase of a new car. Discuss your answers to the following questions: Is the quality good, is the vendor reliable, does the vendor have a favorable reputation, is the company easy to work with? Based on your answers, which of the vendor would be your choice? Why?
