Purchasing and Supply Chain Management

Only available on StudyMode
  • Topic: Supply chain management, Management, Logistics
  • Pages : 6 (1759 words )
  • Download(s) : 1078
  • Published : April 15, 2010
Open Document
Text Preview
Purchasing and Supply Chain Management

Assessment 1
Nessa’s Bar Report

Course Code: BS1D75
Student Number: 08154619, 09046100, 09030883, 09046577, 09047735

Contents

Page
1.1.1 Problem – Poor Organisation on Purchasing and Supply……….. •1.1.2 Solution - Poor Organisation………………………………………. •1.2.1 Problem - Purchasing Policy Procedures…………………………. •1.2.1 Solutions - Purchasing Policy Procedures………………………… •1.3.1 Problem - Poor Management………………………………………. •1.3.2Solution - Poor Management……………………………………….. •1.4.1 Problem - Costs/ Expenses…………………………………………. •1.4.2 Solution - Costs/ Expenses………………………………………….. •2.0 Recommendations…………………………………………………….. •3.0 Conclusion……………………………………………………………. •4.0 References……………………………………………………………. •5.0 Bibliograpgy………………………………………………………………………………………

1.1.1 Problem – Poor Organisation on Purchasing and Supply The business suffers from poor organisation in the purchase of supplies. The purchasing of goods and services for the business use is known as Procurement. There are three managers who all participate in the purchase of items; each person purchases items they think necessary often leading to double orders or items not being bought at all. There are several suppliers used some of which deliver while others operate a cash and carry policy, causing partners to use their own transport. Although several suppliers are utilised, the lack of regular custom by the company causes lack of interest by the suppliers and so the company misses out on priority service and possibly loyalty bonuses sometimes offered by these outlets designed to encourage repeat custom.

Webster and wind (1972) Are concerned with sellers being aware of what buyers may be doing but also it should be important that buyers are aware of what seller are likely to do. A significant amount of stock is wasted due to the haphazard means of stock control. The company likes to have a well filled freezer to protect against low stock levels or unavailability of items, which in turn ties up capital unnecessarily.

1.1.1Solution - Poor Organisation
A solution to this problem could be the hiring of a trained buyer who would control purchases made by the company. The advantage of this would be a single buyer would not order double quantities and excessive or unnecessary stock would not be purchased. As a result stock control would be easier to manage. Organised purchasing would help to keep stock levels steady and unnecessary goods would not be stock piled, thereby releasing capital allowing money to be used efficiently and cost effectively. Hiring an expert may seem expensive but could save significant amounts of money and time. Possibly one of the managers could take part in a purchase training programme to gain the skills as they already have inside understanding of the company and how it is run. This would prove cost efficient and save money on outsourcing. To solve the problem, the organisation could hire trained buyers to take over the three manager’s buying work. The advantages of hiring experts on buying stock for the organisation are that when there is only one person managing the buying, stock would be clearer and overlapping or lack of stock would be avoided. This could release the capital as stock would be more organised and money would be used more efficiently. However, hiring experts might be expensive and would be costly efficient for the organisation. In this case one of the managers could go on purchasing training program to gain skills in terms of buying, meaning the company will have a buying expert, who also knows the business well, and the company will not be wasting capital on hiring an external expert.

1.2.1Problem - Purchasing Policy Procedures
The company experiences problems with paper work not matching the goods purchased. This has resulted in some suppliers banning the buyers from their establishment and refusing credit facilities as payment may have been overlooked or...
tracking img