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Assessment 1 The Report supply chian magement (SM2038) - Essay Example

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Supply chain management comprises of a set of actions which are taken by the management of a company in order to ensure whether the process of supply chain is running effectively or…
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Assessment 1 The Report supply chian magement (SM2038)
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Assessment 1 The Report supply chian magement (SM2038)

Download file to see previous pages... Supply chain management is deeply involved in the successful achievement of desired levels of productivity and profitability by any company or organization. One of the key factors of supply chain management process is purchasing. Gadde and Hakansson (1993) found that purchasing is seen as one of the key strategic functions to be performed by the management of any organization in order to achieve market domination in a competitive market.
In my view, selection of suitable suppliers for a company is critically importance because suppliers are directly involved in the manufacturing process of any product as they supply the raw material to the company which plays its part while setting up the price for a product. Suppliers often charge different prices to the parts of the products that they supply to a company. A company should always select a supplier who should deliver the raw material and required parts of a product at an economical price to the company because it is very important for a company to set a competitive price for any product. And competitive prices can only be set up if cost of manufacturing of a product is less than then actual price of that product in the market. Ford (2002) found that the objective of selecting a suitable supplier in order to cut down the manufacturing cost of a product can be achieved by analyzing previous performances of various suppliers. Ayers (2001) found that the analysis regarding suppliers should be based on the suppliers’ credibility, quality of the raw material that the suppliers provide to the company, and the price at which they supply the raw material. After a complete analysis, the purchasing manager should select a trustworthy and most credible supplier. Price of a product is always set up by determining the actual manufacturing cost of the product. If a company wants to achieve ...Download file to see next pagesRead More
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