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Emerging Issues in Procurement

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Emerging Issues in Procurement

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  • July 2, 2012
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According to Kenneth lysons and Brain Farrington, procurement and supply chain management, procurement is the acquisition of goods and services in return for a monetary or equivalent payment. Procurement however, is the process of obtaining goods and services.(http://en.wikipedia.org/wiki) Emerging issues are issues that are coming up to improve on the purchasing process. The following are some of the issues, Out sourcing, E procurement, Group/consortium purchasing , purchasing card and Green procurement/purchasing. Out sourcing, is the management strategy by which major noncore function are transferred to specialist, efficient, external service providers This is normally done after negotiating on a contract agreement with a vendor who takes on the responsibility for further production process, people management, service and key asset management. Examples of the services include, security, catering and human resource. Some of the advantages associated with outsourcing include,

Cost saving, The lowering of the overall costs services to the business which will involve reducing the scope of defining quality levels, repricing, negotiation and cost restructuring Improving quality: Achieving a sleep change in quality through the contracting out the service with new service level agreements. This is achieved as usually contracted companies want to perform to their best to appease their boss. Increased Flexibility, (adjustment) by focusing on the supply chain functions, major service providers can offer greater flexibility across a wider international market. This is done by focusing on the activities that the company can do best. Core competencies, it enables the organization to focus on core competencies and those not requiring direct control. Despite the benefits outlined above, outsourcing can present many problems as stated below. Poor service delivery, This is in most cases due to poor contract selection and lack of commitment. Usually outsourced companies...