INTEGRATION: STRATEGIC PROCUREMENT AND COMPETITVE ADVANTAGE Integration of strategic procurement and competitive advantages in an organization leads to basic competencies such as having access to raw materials, suppliers with an effective system for measuring quality of products supplied; develop advantage over competitors in relationship with suppliers, working close together with suppliers on product development efforts and close working relationship with suppliers to improve each other’s processes. This will foster benefits for both company and the supplier organization, while providing the maximum transaction value in the long run. Sourcing or procurement is the main aspect of a business organization when considering inputs. Sourcing is the methodology of finding the right supplier, right product, in the right time, at the right price, in correct quantities and right qualities. Sourcing strategy can be illustrated in the following process.
Supply Chain Management Concepts Supply Chain Management is a system and efficient integration between supplier, manufacturer, wholesaler and the customers. The main purpose is to produce merchandise and distribute at right time, the right quantities, to the right locations. These processes are carried through certain skills by maintaining the materials, information, finances and better coordination. The main objective of SCM is reducing cost, time and inventory and satisfying service level requirements (Bevan, 2005, 56). It is sometimes very difficult for organizations to coordinate and integrate all the SC functions which are very different and may require entire new system of operations.
Value Chain Analysis Every process in the organization adds value to the operations of the organization. Be it, production or services. Value chain analysis could therefore be understood as the process of understanding the residue (profit) by understanding the relationship between total revenue and total costs incurred to earn that revenue. A successful Value Chain Analysis helps an organization to identify key areas that are significantly important for managing time and costs involved in operations. Every method mentioned above is a requirement that every company needs to undertake in order to measure its performance.
Boosts customer service is important for supply chain management to impacts the customer service by making sure the right product assortment and quantity are delivered in a timely fashion. Additionally, those products must be available in the location that customers expect. Besides that, improves financial position will increases profit leverage. Firm value supply chain management because it helps control and reduce supply chain costs. This can result in dramatic increases in firm profits.
Organizations understand the importance of the vital role played by relationships in achieving and maintaining the cutting edge at the market place. Previously Peter F. Drucker had suggested that the purpose of any business is to create customers, which gives an opportunity to theorganization to serve them. The success of any organization mainly depends upon sustaining the customer advantage that is retaining the customers for lifetime. Rising of complexities and uncertainties at the market place along with intensifying global competition are forcing the business organization to invest in building customer relationships. Newly sophisticated marketing tool kits are being designed to satisfy and keep hold of customers to accomplish sustainable competitive advantage.
The main motive of this theory is to optimize the value at each stage of a product. It is a marketing theory. This process involves managing the whole lifecycle of a product, from its introduction , design, manufacture, service and disposal to its obscelescence. Product is an important part of a business and so, this is an important theory. ADVANTAGES of the theory : There are some advantages, it is mentioned below: • Identifies the sale opportunity • Enhances the businesses opportunity and grabs them.
Predictive modeling, process re-engineering and transfer pricing decisions can likewise be started. This implies the capability of Activity Based Costing to help management at all decision-making levels is hence powerful. In Activity Based Costing the resources that are utilized to do an action are mapped to the action to make cost objects. It is these cost objects that are assessed by the business to figure out what is the genuine cost of delivering every individual product and service. Appropriately used, an Activity Based Costing System will have the capacity to convey answers to management on operational inquiries
Introduction For decades “quality” has been a leading buzzword in the business world. Huge companies and organisations have built their career around this topic. The application of quality in business has been responsible for the development of new organizations and even industries. The connotation of quality in business focuses on eliminating errors throughout the operations, and producing at the ideal quality level desired by customers, while considering pricing and costs. Quality may not sound as complicated as it is.
Rising customer expectations are the most important trend, and also have to meeting customer requirements. This is also known as the objectives of the logistics. In essence, this indicate that logistics and supply chain management should primarily enable a company to
Transportation of goods is one of the main parts of the economy which supports commercial and productive activity by effective movement and accessibility to the pure and consumption goods. Transportation supports an important domain of products services from manufacturers to user’s centers that remarkablly each country supplies its economic activities in industrial zones based on freight costs (Crainic and Laporte, 1997). The chosen transportation system should have high operating in quality services and economical efficiency, and all transportation companies must consider about their goods delivery time with the cost of service quality. Furthermore, goods transportation must be compatible with political, social and economic changes. But, the thing that causes dramatic investment just in one kind of transportation mode is because of its low costs.