Issues in Purchasing and Supply Management - Essay Example

 A REFLECTIVE ESSAY RELATED TO ISSUES IN PURCHASING AND SUPPLY MANAGEMENT SUPPLY CHAIN ISSUES According to research, supply chain is a business procedure that even though still growing has been available for a considerable number of years. It is evident that supply chain does influence every business or organization irrespective of size, age, department or place. Supply chain is an area where consumers, suppliers as well as interior clients could work diligently together in order to ensure products and services are distributed as needed, of the suitable quality and at the acceptable price. In most cases, stock chain begins through the removal of natural resource or initiation of raw ideas for service and each connect in the chain procedures. Accordingly, the supply chain ranges from raw material extraction or raw ideas origination through a variety of stages to the final sale or delivery to the final client, whether products or services. It is argued that it can also involve the discarding of the waste related with the consumer goods. It has been demonstrated that it incorporates a good number of main success aspects that involve a clear procurement scheme, operative control systems, as well as establishment of proficiency. Thus, supply chain management characterizes and reflects a holistic method to the functioning of an organization. This calls for careful evaluation of all aspects of supply, as they directly affect the operations of an organization. This is clearly demonstrated through the analysis of the case study on Deere& Company. An efficiently operating supply chain can deteriorate over time as the organization adds more goods, suppliers, introduces new clients, or enacts new replenishment schemes or mainly scales in quantity. To demonstrate this issue of stock chain management, Deere & Company, a manufacturer and a dealer of a complete line of agriculture tools, and a wide range of building and forestry equipment and commercial and consumer gear, had yearly sales of over ten million dollars with operations in more than one hundred and fifty nations. The organization had to create a wide-ranging structure for evaluating supply chain procedures and performance to determine issues and ascertain improvement chances. This proven structure permits the company`s customers to get an extremely wealthy and actionable assessment of the prospects for restructuring their supply chain and bring it into line with their business goals in a short time set. In order for the company to achieve its goals or objectives, it was vital that it captures the interests of the stakeholders in order to reduce or avoid losing out its performance. It was noted that the company`s margin had reduced significantly. For instance, the sales income and margin for the past three consecutive years had reduced gradually. Therefore, the budgeted selling cost for the present year was founded on the requirement to match the amount fixed by a key rival. In addition, the company was forced to chart chief supply chain processes information, as well as material flows in these processes for every product lines. This was performed in order to identify the main functional metrics employed to measure the performance of every process and recognize how these metrics are gathered, recorded as well as utilized to categorize, diagnose as well as correct issues. It is thus, recommended that, the best instantaneous action for the company is to discuss a price reduction with Saunders through the use of the collected data. This is also faced with a challenges because, despite Saunders providing high quality services and products, it is strict in terms of its pricing and does not often offer room for negotiations. Moreover, no other companies that can offer high quality substitutes at a fair price are available. As such, Deere Company should request Saunders to employ the supplier they have gotten after carrying out the analysis process. The company should concentrate on the twenty percent scrap rate, or try and attain a new supplier that is ready and willing to collaborate. Therefore, through this, the company will be in a better position to handle or solve its supply chain issues ((Johnson, Leenders and Flynn, 2010). Research reveals that purchasing and supply management experts should become increasingly included, and where necessary, lead the advancement of supply chain management. Nevertheless, it is realized that not all purchasers possess the abilities essential to manage even the upstream section of a company`s supply chain. These can be multifaceted systems notwithstanding the supply chain within and downstream from the company. Supply chain management is fundamental to the company because it includes accountability for the end consumer`s demand right through the company to the providers, as well as where suitable further than that. Therefore, in regard to Deere &Company, such responsibilities need objectivity, an open mind, as well as the capability to work with all stakeholders within the chains (Saunders) including sales, finance, marketing, production and procurement. In conclusion, supply chain is a commercial practice that has been available for a substantial number of years. It is also noted that supply chain is still in the process of developing despite its several years of existence. It is apparent that supply chain does stimulate every business or organization regardless of magnitude, phase, department or place. Due to loopholes in the supply chain of Deere & company, sales and returns have been declining, while the production cost has been increasing. As such, careful review of its processes is necessary, to ensure the company retains its glory in-terms of performance. This is facilitated by the discussions held by Jim, Susan and Jose, in a bid to evaluate the entire process, unearth activities that could be hindering anticipated growth from being realized, and well as come up with realistic solutions. The understanding that supply chain is an area where customers, sellers, as well as inner customers could work industriously together in order to guarantee products drives this and services are distributed as needed, of the suitable quality and at the acceptable price. In most cases, supply chain begins with the abstraction of raw material or instigation of raw thoughts for service and each connect in the chain procedures. From the investigation, stock chain executives have vital role to play in organization of total cost. They are in a position to view and influence the complete cost ground across the business. Therefore, supply chain management targets at connecting goods and services to the market, while at the same time maximizing all the resources, internally, externally, accessible, and putting it in line with the activities directly with the company`s strategies and goals. A significant number of organizations are requesting for the process of supply chain management within their organization in order to help them remain competitive in the market. As such, Deere & company needs to have an indepth analysis of its system and all the stakeholders. References Johnson, P. F., Leenders, M. R., and Flynn, A. E. (2010). Purchasing and Supply Management. McGraw-Hill, New York, 14th edition. Read More