Procurement and Supply Chain Management

PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
by (Name)
The Name of the Class (Course)
Professor (Tutor)
The Name of the School (University)
The City and the State where it is located
The Date
Procurement and Supply Chain Management
It is the acquisition of goods and services from external sources for the benefit of the company. It is quite similar to outsourcing, which entails hiring third-party professionals or companies to perform and provide services in a company. However, the two are; procurement refers to getting materials, while sourcing is the process of vetting or seeking suppliers of the materials for the service. Recently, many companies have adored procurement sectors which can either be centralized or decentralized. In a centralized setup, the decision-making role is on the senior leader, while in a decentralized model, the decision is based on the opinions of all members. The procurement department is said to be very corrupt in issuing tenders. Based on findings, to ensure transparency, an upstream or downstream process can be used. Processes that occur between sourcing and awarding the contract are upstream, while those that occur after are downstream. The upstream processes include requesting proposals, holding auctions for price negotiations between qualified bidders inclusive of the terms and conditions, and analyzing the spending rates among vendors.
On the other hand, supply chain management handles the flow of goods and services from the manufacturers to the consumers. Supply chain management help in maintaining a flow of goods and services (Lysons & Farrington, 2016). The process involves planning between manufacturing or buying goods, sourcing that involves building a relationship with suppliers, managing customer demands, storing and providing goods return services (Cox, 2001). This paper will discuss the causes and impact of the seismic shift in procurement and supply chain objectives caused by procurement with Purpose, collaborative procurement, social value creation through procurement, and the UK public procurement green paper.
Procurement with Purpose
Procurement with Purpose refers to organizations supporting the livelihood as they reach their goals and objectives. It aims at creating livelihood and employment for society by building the economies of families and societies. Procurement with Purpose can be satisfied by ensuring a business meets the community's societal, economic, and environmental needs (Dimitri, Piga, & Spagnolo, 2006). Societal needs are met by meeting and knowing the working conditions and providing jobs for suppliers; economic needs are met by helping the community grow simultaneously. Environmental needs are met through the protection of the environment and carefully using the limited resources. The organization can also support the strategy through carbon reduction, supporting diversity, environmental maintenance, and encouraging local enterprises (Bilgen, Kaygusuz, & Sari, 2004). Unilever is one of the companies striving to meet the procurement for Purpose. Based on findings, unlike most companies producing cleaning products, Unilever does not use fossil fuels (Clay, 2005). The company decided to utilize the plants, plastic waste, and carbon dioxide products readily available, unlike non-renewable fossil fuels. The innovation strategy is called Clean Future which meets the company's needs, customers, and environment (Fallows, 2010). The innovation aims at reducing, reusing, and recycling waste materials through ways it uses to manufacture and package its products, i.e., OMO, Sunlight, Cif, and Domestos.
The success of procurement with Purpose is driven by sustainability assessment, acceleration, and transformation. Assessment refers to understanding the risks and opportunities for change; acceleration is the initiative to change and escape from the risk. Transformations are the procurement and supply chain management that is good for the business and public (Dimitri, Piga, & Spagnolo, 2006). To adopt a procurement with Purpose, the organization must be aware of the known risks and opportunities. Most organizations with the aim of the strategy will include the customers, staff, and other stakeholders to decide on appropriate ways to conduct their activities in the supply chain management to benefit the community (Morledge, Smith, & Appiah, 2021). The organization must also be aware of ways to deal with risks. The organization must also be aware of what best suits the organization and the community. For example, where a company is in the food industry, it can consider fighting against deforestation of their source plants. Companies can also aim at creating job opportunities for the community through apprenticeships or contract jobs.
Procurement with Purpose has greatly affected the shift in basic procurement and supply chain management in society today. Companies using the strategy to provide the services and goods have a win in a competitive industry since they are different from the rest and customers best prefer them. It appears that supply chain management has become more complex as businesses aim to make high profits and impact society and the environment (Dimitri, Piga, & Spagnolo, 2006). Business purposes differ with businesses according to the products they offer. According to research by Nielsen, two-thirds of customers are willing to pay more for products from companies that impact society besides making profits (Nielsen & Treumer, 2005). It is also definite that companies that impact the community are considered ethical and legit hence attracting more customers. Globally, companies are also aiming at reducing poor wages and unemployment by providing job opportunities to quicken the supply chains of a product. These jobs are more available to the minority and women, intending to create gender equality in society (Barraket, 2020). For a company to meet the Purpose for procurement, they need to have close negotiations and interactions with customers and other organizations to identify ways to use their supply chains to fix the problem. Therefore, the success of procurement and supply chain depends on the industry's capacity or business to involve the society in providing their services and fixing societal problems.
Collaborative Procurement
It is centralizing agreements among clients and suppliers to procure work and services to enhance the purchasing power and resources that ensure appropriate financial savings. In collaborative procurement, the organizations that agree to work together should identify the benefits reaped from combining their purchasing powers and resources to ensure the company meets its financial savings, efficiency, and effectiveness (Kim & Netessine, 2013). The goods and services required to be delivered should be repetitive and common among many organizations. Collaborative procurement is common in the construction industry, where contractors, suppliers, and consultants aim at delivering efficient and effective service under minimal or no resource waste (Bakker, Walker, Schotanus, & Harland, 2008). In the sector, it has helped the realization of savings channels and proper working conditions. The collaborative procurement markets comprise client collaboration, client and supply chain collaboration, and supply chain collaboration. The client collaboration relates to the buyers. In this case, the collaborative clients agree to meet their financial savings, efficiency, and effectiveness of their objectives that arise from their combined purchasing power.
Also, the client and supply chain collaboration which considers the buyers and sellers. In this market, the client aims to maximize their savings by acquiring sales discounts; this market is common between the customer and the contractors, advisors, and suppliers. Supply chain collaboration deals with the seller (Walker, Schotanus, Bakker, & Harland, 2013). The suppliers have an aim of providing better contract solutions to gain the value of their money. The market helps the suppliers to reduce the costs that would probably be incurred during the provision of the services (Rimmer, 2018). These agreements may occur between contractors and fellow contractors, suppliers, and consultants. Collaborative procurement has become common since it helps in cost saving among the service providers, provision of services becomes motivation and not through any coercion, strengthens the relationship between service and goods providers with suppliers, and economies of scale through the joining of many organizations and their requirements (Racca, 2018). However, these collaborative procurements may hinder the entry and attainment of government tenders that require many organizations to supply similar products. Also, the size created by the combination of different organizations may be challenging to manage, leading to poor provision of services to contractors.
Collaboration has led to the success of the supply chain due to shared information that leads to increased knowledge. The collaboration leads to an effective and efficient supply chain management among businesses due to trust, commitment: joint decision making, incentives, and information sharing. Trust determines the will of the supply chain partners to provide quality work with a good intention. Commitment refers to the agreement between partners; the focal firms do not take advantage of the weaker partners (Eriksson, Volker, Kadefors, Lingegård, Larsson, & Rosander,2019). Unity in decision-making helps prioritize objectives in the supply chain and meet strategic plans and expectations of the customers. Incentives are motivators that lead to the success of the supply chain partners and objectives. It appears that Information sharing helps in appropriate tactical and strategic decisions between partners in the supply chain (Costin, Kidd, Simon, & Edwards, 2019). Besides, due to the involvement of many organizations, then there are benefits gained from economies of scale leading to the provision of goods and services worth the value of their money. Also, collaborative procurement has caused a positive shift in supply chain management and procurement since it fastens the process (Deep, Gajendran, Jefferies, & Davis, 2018). The involvement of many organizations ensures that quality services are provided in minimal time. Therefore, the provision of services and flow of goods in the market has become manageable and effective to both the clients and service providers. Trust, decision collaboration, and information sharing are crucial in collaborative procurement to ensure performance is maintained. Negotiation and information sharing contribute to improved customer satisfaction. The goods and services provided result from negotiation and conclusion from suppliers; minimal errors may occur. The supplier relations with contractors become improved since the services provided are worth the value of their money.
Creation of Social Values through Procurement
Social values in procurement refer to the nature of thoughts among people concerning the limited and allocation of scarce resources. Social values also refer to the additional benefits that accrue to an individual or community from procurement processes and purchasing goods and services. Attachment people relate to the economic, environmental, and social c...