Anechoic Technology in Usage - Essay Example

Name University Course Tutor Date Executive Summary Anechoic Technology provided anechoic and screened room solutions for all EMC and RF Protection environments. It also manufactures cabinets for the telecommunications industry and various other subcontractor works with British Telecom and Marconi Systems being their main client. The Anechoic Technology operates a well-known brand EBS system with modules for accounting, HRM, and operations with an annual turnover of £40 million, procurement expenditure of around £15 million and issued purchase orders nearing 200 per month. At present, company has an ‘in-house’ developed procurement system and has a supply base of around 900 suppliers who cover a multiplicity of products and services and cover most of the procurement needs. The company needs to reduce the figure to at least 500, which is manageable. As the procurement manager, to achieve this, first is to move the company from in-house to outsourcing. There and then, various other actions that should be taken. They include the application of Supplier Relationship Management (SRM) on the entire supply base. The SRM process will involve five steps: that is supplier identification, supplier segmentation, the relationship analysis, relationship management and the evaluation of the SRM results. Then is the employment of the use of Customer Relationship Management (CRM) to manage the customer relationship. The company should be upgraded with the new technology (both the storage and communication devices among others) to aid on the efficient of operation. The theory of make-or-buy is in particular known to involve the determination of whether a given product should be made in-house or purchased. Outsourcing, on the other hand, is a practice that is used by companies to cut off excess costs by transferring part of their work to outside suppliers instead of completing it internally. As the procurement manager, I will not recommend the company to change any/or all components to in-house manufacturing. The target being to reduce the expenditure cost. There is the need to analysis the company supply base. For the sec of our project, we will employee the Kraljic’s procurement mode. The mode highlights purchasing as an important managerial area within an enormous impact on profit. The Kraljic Portfolio Purchasing Model relies on two dimensions, which are supply risk and profit impact, on which we should base when analyzing the supply base. The e- Supplier Relationship Management (e-SRM) is the utilization of the web to develop long-term supplier relationships that will assist in the growth of collaborative approaches to joint product development, negotiation, contract management and CPFR. Technology advancement (for example the uses of CRM) has greatly enhanced the Supplier Relationship Management in various ways that have enabled many business owners to keep up with their customers. Generally, the company should implement the stated recommendation for the better operation and the performance. Word count: 468 words Procurement and Purchasing Strategies Report Procurement stratagem can be termed as the planned approach of cost-effectively purchasing the company’s required suppliers having in mind the various elements and factors such as the funding and the budget, timeline for procurement, opportunities, project risks among others (Hrcak.srce.hr, 2016). Taking that into consideration, several actions are to be taken in order to deliver an effective strategic procurement for the EBS Company (In search of anechoic discussion, 2016). First of all, as the procurement manager, I will sit down with my department to assess the detail of our duty (which will include the available and the existing resources, objective, timeline, and the budget). After that, the next action to be taken is to change the present procurement system from in-house to the outsourcing procurement system. With this, the company will be able to reduce the suppliers wages by retrenching others since most of the transaction should be carried out over the internet, for example, sending of the tender forms, paying of invoices among others (Cohen and Roussel, 2013). Keeping in mind that the company is now operating on outsourcing, I will employ the use of Supplier Relationship Management (SRM) on the entire supply base to minimize risk and maximize value (Lintukangas, 2011). Under that, I will employee the use of Customer Relationship Management (CRM) to manage the customer relationship. Several dedicated account managers will be nominated to manage a number of strategic clients with the overall goal being to create a strong relationship with the premeditated customers to protect the existing business and establish more business with them (Buchanan, 2008). To elaborate on the above mentioned, the following are the steps that will be undertaken. First, supplier identification; will sort out all the suppliers to whom the invoice was paid over a specific period. Next, is the supplier segmentation. Suppliers list of invoices to be segmented to enable find those that can contribute to the business strategy (Venkatesh, Dubey and Aital, 2014). Followed is the relationship analysis. By using the supplier relationship tool, the company should define the existing relation with especially the top segment of those suppliers classified as interested in building the partnership (Buchanan, 2008). Finally, relationship management and the evaluation of the SRM results for the sec of the series of recommendation. Furthermore, the company should be upgraded with the new technology to aid on the efficient of operation. New storage software like the Oracle, MySQL, etc. should be used for the storage of the company details such as sales, pricing, customer details among others for faster/efficient retrieval and operation (Cohen and Roussel, 2013). Also, to cut down on the excessive expenses, I will reduce the number of the company workers by the retrenchment of some of them. The theory of make-or-buy particularly involves the determination of whether a given product should be made in-house or purchased. It is a traditional method that uses standard cost accounting method. Mainly the theory depends on two factors; the availability and the cost of the product (Buchanan, 2008). It is an important theory in manufacturing today as they rationalize the manufacture supply-chain for improved production and cost (Venkatesh, Dubey and Aital, 2014). In conjunction with that, Outsourcing is a practice that is used by companies to cut off excess costs by transferring part of their work to outside suppliers instead of completing it internally. Sometimes, outsourcing also involves the transferring of assets and employees from one company to another though it is not a mast. This also entails the act of handing over the control the public services to the for-profit corporations. It involves both the domestic and the foreign contracting (In search of anechoic discussion, 2016). However, as much as the in-house manufacturing seams a better decision to take, I am not recommending the company to change any/or all components to in-house manufacturing. Considering the fact that the company is working towards the reduction of the cost, in-house manufacturing will create more unnecessary cost. It will increase wages and other benefits such as medical, pension and vacation which may become too costly for the company to subsidize (Ross and Ross, 2011). Besides that, changing to in-house will limit the staffing flexibility, expertise and the work quality (Venkatesh, Dubey and Aital, 2014). An outsourced contractor can offer flexibility in providing the correct staffing level and needed the skill set quickly, with a reduced cost and time venture, as well as offering knowledge that may not be available, or is insufficient, within the in-house staff. This expertise will also positively influence the value of the work being performed. This will provide the flexibility to exploit expert services as needed, instead of suffering the cost of manufacturing in-house competencies that are not required on continuous or a permanent basis (Venkatesh, Dubey and Aital, 2014). In addition to that, the company should employee out-source experts. Reason being, an out-sourced expert, can offer staffing well-versed usage of the current technology without necessarily the company providing the technology/equipment as well as offering the training to the in-house staff does reduce the cost incurred (Williams, 2014). Moreover, by developing in-house, it will cause the management to loss its concentration on the critical objectives and the core proficiencies in running the business. Together with the above-listed reasons, outsourcing also offers other advantages like sustained values and savings. It also improves control over the procurement processes. The reason is that, the processes are audited according to the set rules and regulations of the context compliancy (Ross and Ross, 2011). Finally, outsourcing will also optimize the procurement transaction cost as well as the provision of critical management information. As you can see, the company opts to reduce the production cost as it maximizes the profit. This can be analyzed using the Kraljic’s procurement mode. The matrix highlights purchasing as an important managerial area within an enormous impact on profit (Vaidyanathan, Devaraj and D'Arcy, 2012). Using the matrix, the process of purchasing can be classified into four stages. That is material management, purchasing management, sourcing management, and supply management. The supply management is critical when the need of purchasing is high, and the supply market is complex. To be more specific, Kraljic Portfolio Purchasing Model relies on two dimensions, which are supply risk and profit impact (Meyersound.com, 2016). The profit impact is normally defined from low to high. This is concerned with the strategic benefit of purchasing a given material and the impact that it has on the production line, together with the costs that material has on the company’s profitability. On the other hand, supply risk is usually defined from high to low. Supply risk is concerned with the complexity of the supply. Normally depends on whether the material has latest technology and are up-to-date. The figure 1 below shows the kraljic portfolio-purchasing model (Ross and Ross, 2011). Figure 1 As it is seen from the figure 1, Kraljic distinguishes the product categories of the two dimensions into four types. The first type which is strategic items. It is a type high-profit impact and high risk. Primarily, such products are normally purchased from one supplier (Vaidyanathan, Devaraj and D'Arcy, 2012). The type can exhibit a balance of power between the suppliers and the company, but once the supplier ceases to deliver, the purchasing stagnates. That is to say, the price of the product is highly determined by the raw material (Thai, 2009). The second type is the bottleneck items. It is a type of low-profit impact and high supply risk. Items in this type does not represent high value though, are a vulnerable factor in the all supply chain. They are products which are necessary for the production but are hard to be obtained resulting in an imbalance in power between the supplier and the company, leaving the supplier to be the dominant factor (Venkatesh, Dubey and Aital, 2014). Last but not least, the leverage items. These have a high-profit impact and low supply risk. They are products that are easily available from various suppliers. Largely determines the cost price of the final product (Ross and Ross, 2011). Pretty change in the product price or quality will greatly affect the cost price. In a scenario of a balance of power between the suppliers and the company, it falls out that the company is the governing factor (Thai, 2009). Finally, is the non-critical items. It is a type of low-profit impact and low supply risk. This is the type of product that results in the least problems ( in terms of purchasing performance). They are a type of products that represent a low value hence can be purchased from a different supplier and in different varieties. Most of the raw materials and the products fall into this category, and they have a balance of power between the suppliers and the company. Much money and time can be saved by simply standardization (Ross and Ross, 2011). The e- Supplier Relationship Management (e-SRM) is the utilization of the web to develop long-term supplier relationships that will assist in the growth of collaborative approaches to joint product development, negotiation, contract management and CPFR (Lintukangas, 2011). The advancement in the technology has greatly enhanced the Supplier Relationship management in various ways. Technology enables many business owners to keep up with their customers through the application of customer relationship management (CRM) (Lintukangas, 2011). Company managers can now meticulously plan their interactions with their customers in record time. The CRM enables firms to keep their customer details like the conducts, products purchased, their feedbacks, marketing material among others in one place (Meyersound.com, 2016). Technology provides business intelligence software that allows companies to automatically organize and analyze all of the data paints that makes the company what it is (Ross and Ross, 2011). These data can include the pricing information, sales information, and the supplier contracts. Normally the applications are programmed to identify and report the important information that provides the company a valuable perspective on its health (Lintukangas, 2011). Recommendation The company is incurring unnecessary higher expenses. As the procurement manager, I will recommend that the company implements the following to cut down on this costs and for efficient operation. • To change from in-house to outsourcing: -this will help it to cut down on additional expanses like pension among others. • To employ the use of Supplier Relationship Management (SRM) on the entire supply base: -this will help to minimize risk and maximize value. • To use Customer Relationship Management (CRM): - to manage the customer relationship. • To apply new technology: -for example the new storage software to storage the company details such as sales, pricing, customer details among others for faster/efficient retrieval and operation. • To retrench excessive workers: -for example, the excessive supplies as for now most of the exchanges are done online. • To operate with the non-critical items: - They are type of products that represent a low value hence can be purchased from different supplier and in different varieties thus results in the least problems • To Increase efficiencies through use of wireless or virtual technology • To employ professionals who create success for customers • Improve distributor and supplier relationships • Introduce existing products into a new market • Improve our service approach for new and existing customers Anechoic Technology is a well-established company that only needs proper planning and management. With the discussed action plans and the listed recommendation, the company will progress smoothly and optimize its returns. Word count: 2,355 words References 1. Buchanan, M. (2008). Profitable buying strategies. London: Kogan Page. 2. Cips.org. (2016). Supply Management - Supply Management. [online] Available at: http://www.cips.org/supply-management/ [Accessed 21 May 2016]. 3. Cohen, S. and Roussel, J. (2013). Strategic supply chain management. New York: McGraw-Hill Education. 4. Hrcak.srce.hr. (2016). [online] Available at: http://hrcak.srce.hr/file/122098 [Accessed 21 May 2016]. 5. In search of anechoic discussion. (2016). NPLANTS, 2(3), p.16032. 6. Lintukangas, K. (2011). Supplier relationship management capability in global supply management. IJPM, 4(1), p.1. 7. Meyersound.com. (2016). Meyer Sound : The Anechoic Chamber. [online] Available at: http://www.meyersound.com/products/technology/chamber.htm [Accessed 21 May 2016]. 8. Ross, D. and Ross, D. (2011). Introduction to supply chain management technologies. Boca Raton: CRC Press/Taylor & Francis. 9. Thai, K. (2009). International handbook of public procurement. Boca Raton, FL: CRC Press. 10. Vaidyanathan, G., Devaraj, S. and D'Arcy, J. (2012). Does Security Impact E-procurement Performance? Testing a Model of Direct and Moderated Effects. Decision Sciences, 43(3), pp.437-458. 11. Venkatesh, V., Dubey, R. and Aital, P. (2014). Analysis of sourcing process through SAP-LAP framework - a case study on apparel manufacturing company. IJPM, 7(2), p.145. 12. Williams, A. (2014). Re-examining procurement tenders with respect to price: a transaction cost model of Portland procurement agencies. IJPM, 7(5), p.596. Read More