Highlight the impact of containerisation on an international supply chain - Essay Example

This staggering figure constitutes of 15 percent of the global vehicle markets. The company generated net income of $2.8 billion on over $193 billion in revenues (Alden et al, 2006). General Motors procurement strategy General motors’ (GM’s) business operations are based on a sound procurement practice and basic business integrity. Officials responsible for procurement and supply chain make their procurement decisions solely on the basis of the credibility of the suppliers that offer GM the best value for goods and services that they require.

They primarily avoid any actions that indicate that their purchasing decisions are improper or irrelevant consideration whether illegal, such as bribe or kickback, or technically legal such as favours, free entertainment, personal friendship or gifts. The global purchasing and supply chain of GM holds the responsibility of procuring all goods and services that are required by the company and its joint venture and alliance partners spread over all four business regions of the world. This operation involves the procurement of parts used in the production and manufacturing of vehicles as well as products and services that are utilised for the purpose of providing support to the development and production of those vehicles.

Following this strategy has not only helped boost GM’s production all over the world, but has also helped their suppliers to do business in unprecedented volumes thereby providing them with an opportunity to expand their own operations across the world (GM, 2010). The new system of procurement and supply chain management in GM has been termed as “Centralized Decentralization” by the vice president. The basic idea behind this system as has been explained by the vice president is to centralize the procurement of individual components and materials in order to leverage the company’s buying power and scale (Supply chain digest, 2008).

According to Ageshin (2001), General Motors has various characteristics that make it an ideal example of an e-procurement strategy following company and a great example of how e-procurement is reshaping U.S. manufacturing. The company has the ability to increase the volume of its sales through its e-procurement system up to $300billion-$500billion per year. This has always been a primary strategy adopted by the company in order to generate further cost savings associated with purchasing across the whole supply chain.

The fact that, GM was very familiar with the advantages of electronic data interchanges with its suppliers and because of its dominant position in the supply chain industry, the company adopted e-procurement system very early. GM started pursuing the idea of e-procurement as early as 1999 with the help of its technology partners i2 Technologies and Commerce One who created a B2B trading community called TradeXchange. This e-procurement system that the company adopted led to quicker information flows and extensive information sharing across the supply chain.

This has resulted in the significant improvement in the quality of planning and forecasting for the company and its suppliers thereby boosting their businesses. The Web-based form of e-procurement has increased product customization and developed build to-order capabilities at GM. General Motors’