Practitioner corporate award

Practitioner corporate award

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Executive Summary

Procurement and supply are areas of great importance in any organization, and can affect the performance of the activities in that organization. Organizations buy materials and equipment from suppliers to enable the running of their businesses and the department of procurement and supply play a big role in ensuring that there is no shortage of the essential goods. This report will analyse the opportunities in supply and procurement that enable the organization to save on time and money, while increasing the efficiency of the business. The paper will also analyze the means to improve the supply profile and the reasons for enhancing collaboration and engagement of the stakeholders in procurement and supply. The department of procurement is very important as it ensures that there is no artificial shortage of commodities through policies and procedures. There report gives some recommendations that enable the effective running of the organization’s supply and procurement departments.

Practitioner corporate award

The opportunities for the procurement and supply to create savings or efficiencies or other sources of added value

Procurement involves the acquisition of materials and equipment for an organization to enable smooth running of the business while supply is availing of the necessary products by an organization. The opportunities that can create savings and efficiency include

Automation of the procurement process

Many companies and business organizations use the traditional methods of procurement involving a lot of paper work and long procedures. There is a lot of time wastage and also wastage of other resources, such as money when using the traditional procurement methods. The modern technology can play a big role in the improvement of the procurement procedures by shortening the duration and reducing the amount of paper work. Digitizing the procurement procedures will go a long way in ensuring efficiency in the procurement process and save a lot of money. The use of technology such as the computer will assist to carry out procurement functions by advertising through tenders, binding, and offering tenders over the internet. Online transactions are very common nowadays through the use of the internet and the social media to enable many people to view the items on sale. The digital technology enables organizations to carry out their transactions without the necessity of travelling to the banks or other financial institutions to make payments. The digitization, therefore, saves on time, costs, and physical energy of both the buyer and the supplier. There is also the assurance of efficient services when procurement process is through the modern technology than the traditional paperwork methods. By business organizations such as the oil field company, they can save on time and cost when exporting the oil products to the other countries. Technology shortens all the tendering and binding process making it very efficient and convenient for both the seller and the buyer.

Use of facility management and professional services

For any business to prosper there must be proper management and use of professionals with procurement skills and experience. Mismanagement will lead to the loss of business assets, such as cash, especially in cases where there are disagreements leading to the cancellation of tenders. Mismanagement also causes inefficiencies leading to lack of trust by the clients and the interested parties. Delayed procurement procedures cause losses the business, which lowers the amount of savings for the company. The use of professional experts, who have the knowledge on procurement procedures, increases the efficiency of the business through good decision making and use of the modern technology in procurement.

Performance evaluation and rating

Evaluation is important as it enables the organization to know when it is making losses, especially through the use of lengthy procurement procedures. Through performance evaluation an organization can adopt better tendering processes to enhance their savings and increase the efficiency of the organization. Performance evaluation leads to a strong relationship between the suppliers and the buyers, they can solve any misunderstandings between them.

How to improve the profile of the supply function

The performance of any organization depends on the way it organizes its supply chain to save on cost and improve on the efficiency. The main factors to improve the supply function profile are

Differentiation of the supply function and corporate strategies

In any business organization, such as the oil company, it is wise for the management to unite all the leaders dealing with supply and management for effective decision making. The company must offer satisfying products to their customers and know their needs through the use of innovative means. Each department must know its roles and perform the role with complete commitment and strength. Corporate strategies should not overwrap with the supply functions to avoid confusion and duplication of the roles.

Modernization of the supply function

Modern technology plays a big role in the management of the supply chains for effective running of business organizations. The complex data analysis required in big organisations requires digitization and an experienced manager make data management more efficient. Decision-making is an important aspect of any business organization and requires qualified and committed staff to enable the company come up with excellent recommendations concerning the supply management.

Setting of performance standards

The performance indicators in any organization are very important since they keep the business and the stakeholders alert and ready to solve any problem. Some traditional performance standards involved the costs, the quality of service, and the capital investments. There are other means of rating the performance of the supply functions such as the market trends, new product’s launch, and the production cost in the market. The rating of any organization standards is very essential as it provides the basis for decision-making on the best practices to manage supplies and the organization’s assets.

Creation of collaboration with the stake-holders to increase early engagement in the procurement process

Collaboration of the stakeholders in any organization is very important to enable full engagement and participation in the procurement process. Collaboration creates unity and harmony, which creates an environment for excellent decision-making. Some of the ways to create collaboration are

Involvement

In any organization, such as the oil company it is advisable to involve every stake-holder in the management and decision-making to aid in the procurement process. Involving the organizational staff in the procurement exercise and its management brings about innovation through sharing of ideas. It is wise to engage the right people for the right job and ensure that all the stakeholders in an organization take an active role in the procurement activities to create unity. All employees, employers, managers, and the authorities must unite and carry out their duties without failure.

Communication

Communication is very essential in every department, more so n the procurement department. Good communication reduces misunderstandings and ensures harmonious coordination of the activities taking place regarding the procurement process. Breakdown of communication leads to disagreements causing delay to the procurement exercise. The delay will lead to massive loss if important items run out of supply in the organization since it will affect its daily activities.

Responsibilities

The management of any organization should ensure that the stakeholders do their work effectively and offer advice on what each of them should do in the business or company. Responsibility of the stakeholders is necessary to enable everybody to do the assigned duties effectively to reduce delays. Irresponsible stakeholders must face disciplinary action to avoid having many challenges in the organization.

The need for organizational policies and procedures to implement effective procurement and supply

Policies and procedures are very important in an organization as they enable the stakeholders and the senior managers to work without any major conflicts. The procedures enable the stakeholders to know their responsibilities and the time to perform different functions related to procurement. The policy guidelines help the procurement and the supply managers and officers to work together without any conflict of interest. For an organization to carry out its procurement and supply functions there must be some procedures and rules to govern and direct on the responsibilities of every stakeholder.

Conclusion and Recommendations

Procurement and supply is an important department in any organization and proper management is very crucial for effective running of the organization. There are various opportunities to create savings and effectiveness in procurement as discussed in the report. The organizations need to improve their supply functions and enhance the collaboration of their stakeholders in running the company’s activities. This report recommends that the all organizations should adopt the means that promote the efficiency of the procurement and the supply exercise for maximum savings and effectiveness. Organizations must also have policies and procedures to improve supply and procurement and more research on the procurement exercise is vital to improve its efficiency and effectiveness.