Application of Tools for Effective Purchasing for an Organization - Research Paper Example

Application of Tools for Effective Purchasing For an Organisation Table of Contents Introduction 3 Suppliers Relationship Management (SRM) in Relation to different Purchasing Tools 4 Role and Impact of different Purchasing Tools in Modern Organisations 5 Role of different Purchasing Tools 5 Impact of different Purchasing Tools 6 Advantages and Applications from Different Purchasing Tools 6 E-Procurement Advantages and Applications 7 Lean Purchasing Advantages and Applications 8 MRP Advantages and Applications 10 Tender System Advantages and Applications 11 Disadvantages and Risks from different Purchasing Tools 12 E-Procurement Disadvantages and Risks 12 Lean Purchasing Disadvantages and Risks 13 MRP Disadvantages and Risks 14 Tender System Disadvantages and Risks 15 Strategies for Integrating different Purchasing Tools in the Organisational Process 15 Strategies for Integrating E-Procurement 15 Strategies for Integrating Lean Purchasing 16 Strategies for Integrating MRP 16 Strategies for Integrating Tender System 17 Wal-Mart and its Purchasing System 17 E-Procurement in Wal-Mart 18 Lean Purchasing in Wal-Mart 19 MRP in Wal-Mart 20 Conclusions and Recommendations 21 Conclusions 21 Recommendations 22 References 24 Bibliography 28 Introduction Procurement operations have emerged as quite a decisive aspect of every business enterprise or organisation in the modern phenomenon. This largely influences the overall performance of an organisation. Thus, it is important from an organisational perspective to conduct effective purchasing strategies in its business process. Effective purchasing leads to the increase in the organisational efficiency and effectiveness (Cook, 2013). Correspondingly, it contributes to customer satisfaction, which ultimately leads to the organisational growth and development. In order to implement effective purchasing system in an organisation, there are several tools available to the leaders. These tools commonly include e-procurement, material requirement planning (MRP), lean purchasing, and tender system, among different types of purchasing systems (Cook, 2013). In this regard, e-procurement is the use of internet technology and others to assist in the management process of Supply Chain Management (SCM).Lean purchasing, in the similar context, is referred to a new concept of purchasing system, where the organisation eliminates all the waste attributes from the SCM process. On the other hand, MRP is a type of purchasing process, which involves the overall production planning at the initial phase of the purchase. It also involves the planning of inventory control and scheduling of the processes. In addition, tender is a structured form of purchase that involves request to vendors or suppliers for the supply of raw materials (Kovcs, 2013). Contextually, the objective of the current study is to understand the applications of different tools for effective purchasing by an organisation in a comprehensive manner. In order to gain comprehensive understandings related to the different purchasing tools used by the corporate organisations, consideration of a real organisation is very crucial. It would provide adequate and appropriate understanding of the practical world in current business environment. To suffice the stated objective, the organisation selected for the current study is Wal-Mart Stores, Inc., which is a retail organisation and has several suppliers making its SCM strategies more prominent and critical to its success potentials (Roberts & Berg, 2012). Thus, the study on purchasing tools of Wal-Mart would provide comprehensive understanding to the different types of purchasing tools used by the organisation. Suppliers Relationship Management (SRM) in Relation to different Purchasing Tools According to OBrien (2014), SRM refers to one of the significant disciplines in the modern day organisational process. It is considered as a comprehensive approach through which, organisations can manage its relationship with its suppliers. This management of the relationship between the two parties is largely dependent on the effective interaction and communication between the two parties. In agreement to the notion, Buttle & Maklan (2015) suggested that SRM leads to the effective flow of information from both the parties and is considered as an important component of Supply Chain Management (SCM). Buttle & Maklan (2015) also conveyed that SRM has a significant impact on different purchasing tools used in the corporate sector. In this regard, it is eminent that SRM leads to the overall reduction in price volatility as observed in the purchasing process. Thus, it does not affect any of the parties majorly. OBrien (2014) however commented that SRM leads to continuous improvement in the purchasing process through different tools. It is also eminent that SRM leads to the establishment of a long-term purchasing deal among the parties, which considerably deliver benefits to all. OBrien (2014) also suggested that SRM has major contributions to the reduction of costs to both the parties involved in the purchasing. Thus, it provides significant competitive advantages to each of the parties involved in the deal. Besides, Buttle & Maklan (2015) also suggested that SRM leads to the overall improvement in the organisational efficiency and effectiveness that further supports an organisation to attain its determined goals and objectives. Thus, it is eminent that SRM is highly important from the organisational perspective. Moreover, it considerably supports in increasing the effectiveness of the different purchasing tools used by the organisations in the modern context. Role and Impact of different Purchasing Tools in Modern Organisations Role of different Purchasing Tools Pablos & Patricia (2012) suggested that different purchasing tools involved in the organisational process have major roles to the organisational success in the attainment of its overall objectives. Pablos & Patricia (2012) thus suggested that such tools have a major role in encouraging organisations to participate in dealing with the suppliers. It is thus eminent that there are several organisations throughout the world, which do not purchase raw materials or other products from any of the suppliers and hence, such organisations are largely self-depended. However, Hagstrom & Wollner (2011) commented that such organisational process significantly reduces organisational efficiency and effectiveness. In this regard, the different purchasing tools, including e-procurement, MRP, lean purchasing, and others have a major role in encouraging organisations to integrate and implement such tools in its organisational process. Kappauf & et. al. (2011) also commented that purchasing tools have a major role in enriching the relationship of an organisation with its suppliers. Thus, it implies of its significant role in improving SRM within an organisation. Impact of different Purchasing Tools The different purchasing tools used in an organisation have imposed considerably major impacts on it. In this regard, Towey (2012) conveyed that the use of different purchasing tools have led to the centralisation of organisational processes, which has further supported in effective decision-making and proper control over every aspect of the organisation. Besides, Sharman & et. al. (2011) commented that it also has major impacts on reduction of the operational errors, improvement in the operational cycle-time savings, inventory savings, and staff savings. Ruppe (2014) thus suggested that purchasing tools also have some major impacts on the organisational strategic measures. In this regard, it is eminent that purchasing tools leads to the overall improvement in the quality, supplier performance and customer satisfaction. It also has an impact on the reduction of the organisational costs, which considerably supports the modern organisations. Advantages and Applications from Different Purchasing Tools Different types of purchasing systems have varied applications and advantages to the firms. The current study herewith attempts to provide the advantages and applications of different purchasing tools inducing e-procurement, lean purchasing, MRP, and tender system. E-Procurement Advantages and Applications Pablos & Patricia (2012) commented that e-procurement has certain considerable applications and advantages, which significantly benefits the organisation, considering the modern scenario and managerial demands. One of such benefits of e-procurement is that it considerably reduces the cost of the organisation. Kovacs (2013) also suggested that e-procurement has a significant contribution in increasing the visibility of organisational spending. This significantly supports in improving the organisational control related to every aspects of the business process. Sharman & et. al. (2011) also conveyed that e-procurement has a major contribution in improving the productivity of the organisation. This improved productivity of an organisation through e-procurement considerably supports the organisation in attaining competitive advantages, which eventually supports it to attain the determined goals and objectives. Besides the above-mentioned advantages of e-procurement, Pablos & Patricia (2012) have also suggested of some of its applications to the business organisations. In this regard, one of the most decisive applications of e-procurement is evident in the form of technological improvements. It has its application in several technological aspects, which include the electronic requests for information (e-RFI) as the most crucial aspect. In addition, Pablos & Patricia (2012) have also commented that e-procurement has a major application in other technological aspects like request for proposal (e-RFP) and request for quotation (e-RFQ). Besides, Ruppe (2014) suggested that e-procurement also has its applicability in several other aspects of a corporate entity. These commonly include e-sourcing, wherein new suppliers of different products are identified through internet technology. Kovacs (2011) identified another crucial application of e-procurement, which is the Web-Based Electronic Resource Planning (ERP). This software based e-procurement system significantly supports in the organisational improvement in effective creation and approval of purchasing requisitions. Moreover, it also supports in effective placing of purchase orders and the corresponding attainment of goods and services. Islam & Zhu (2012) correspondingly conveyed that e-procurement has a considerable application to e-MRO. This supports the organisation in effective management in maintenance, repair, and operations of the organisational products. Islam & Zhu (2012) also conveyed that e-procurement has a significant application to e-reverse auctioning. In this regard, the corporate organisations are noted to have the opportunity to purchase goods and services through several known and unknown suppliers using the internet technology. Thus, it is eminent that the e-procurement system has some significant advantages and applications in the modern organisations. Lean Purchasing Advantages and Applications Hagstrom & Wollner (2011) conveyed that lean purchasing is one of the key tools for effective purchasing of products, which several modern organisations currently witnesses. In this regard, it is worth mentioning that there are several advantages of lean purchasing, which considerably attracts the organisations to implement such tools in its business process. Hagstrom & Wollner (2011) suggested that one of the major advantages of lean purchasing is its effectiveness in lowering the inventory cost. This is largely because of the gradual decrease in the quantities of raw materials. Chen & Cox (2012) also conveyed of another decisive advantage of lean purchasing, referring to the increased productivity and flexibility of the organisations. In this regard, it is important to note that the employees in the organisation shifts different parts through the organisational process considering single piece at a time. This considerably increases the degree of organisational flexibility and productivity. Chen & Cox (2012) also conveyed that lean purchasing considerably reduces organisational waste in its operational process. There are several organisational wastes that an organisation witnesses, which include excess inventory, waiting time in supply of raw materials and others. The elimination of these would considerably increase the organisational effectiveness and efficiency, which are regarded as significant advantages to the organisations. Besides, Hagstrom & Wollner (2011) suggested of another significant advantage of lean purchasing, which indicates to the improvement in the organisational process and product quality. The organisation and its employees are in a constant process in improving the quality of the goods and services. Wincel (2004) accordingly suggested that there are certain applications of lean purchasing, which are of extreme importance from the perspective of the investors. As the tool is prepared by Toyota and extensively used in the organisation it is eminent that the tool has a significant application in the automobile industry, which involves assembly line organisational process. Furthermore, Kerber & Dreckshage (2011) conveyed that besides the automobile industry, lean purchasing also has significant applications in the industries like health care, Information Technology (IT), construction, among several others. It also has its application in the government process. Thus, it becomes eminent that lean management has significant applications and advantages in the modern era on organisations. MRP Advantages and Applications Kappauf & et. al. (2011) suggested of MRP as one of the decisive tools for effective purchasing of an organisation. There are several advantages of MRP, which leads to its effectiveness. In this regard, Kappauf & et. al. (2011) conveyed that increase in customer satisfaction and service is one of the most decisive advantages of MRP. This has largely influenced several organisations to implement MRP in its organisational process. In addition, Fujii (2013) suggested that MRP system of purchasing leads to the improvement in the effective utilisation of facilities and available resources of the organisation. This is of significant advantage from the perspective of modern organisations. Fujii (2013) also commented of other advantages of MRP, which is of significant importance from the perspective of modern organisations referring to the improvement in the inventory planning and scheduling. This reduces organisational costs, which subsequently implies the overall improvement in organisational efficiencies. Moreover, Kappauf & et. al. (2011) also suggested that MRP has been considerably effective in improving organisational response to market change. This is also considered as a significant advantage from the perspective of organisations. Kappauf & et. al. (2011) also conveyed that MRP supports organisations to reduce the inventory to the lowest possible level without affecting customer service. This is considered as a significant advantage to modern organisations as it would increase the organisational efficiency to a large extent. The report of Oracle (2013) suggests that MRP has some of the significant applications, which tends to considerably attract corporate organisations to implement such purchasing tools in their business process. This type of purchasing is most suitable in the organisation, wherein purchasing of raw materials and the subsequent production process exists in a discreet manner. Furthermore, the report of Oracle (2013) also conveyed that MRP is significantly applicable to the organisation, wherein the delivery of products is short term based. This is particularly because MRP purchasing tool demands for higher flexibility, which is feasible in the short-term period. Thus, it is eminent that MRP has some certain significant applications and advantages, which considerably attracts the corporate organisations to implement such tools in its business processes. Tender System Advantages and Applications From a critical perspective, Towey (2012) suggests that there are certain advantages of tender system, which significantly attracts organisations to implement such system of purchasing. According to Towey (2012), one of the major advantages of tender system in purchasing of products by the corporate organisations is the reduction of cost. It is noteworthy in this context that tendering leads to the employment of highly efficient employees and the use of advanced technology in the production process of a firm. This considerably reduces the cost of the organisation. The decrease in organisational cost further supports the attainment of competitive advantages by the organisation. Moreover, Towey (2012) conveyed that tendering system is also a major advantage from the perspective of organisations due to the improved quality of the products. The effective and efficient employees in tendering process along with the improved technology also support organisations to improve its quality level to a higher level. In this respect, Gasos & Thoben (2012) suggested that tender system is applicable in several industries. However, this system of purchasing is widely notable in construction industries. In this regard, Phillips-Wren & et. al. (2014) commented that besides construction industries, tender system of purchasing is also applicable in other sectors like manufacturing, railways, and others. Disadvantages and Risks from different Purchasing Tools Besides some of the significant advantages and applications of the aforementioned purchasing tools, there are particular disadvantages and risks as well, found to be associated with these purchasing tools. The underneath subheads illustrates the same in detail. E-Procurement Disadvantages and Risks Trkman & McCormack (2010) suggested that despite some of the significant advantages and applications of e-procurement system of purchasing, there are particular disadvantages and risks associated with the same, which discourages any business enterprise to implement the e-procurement system. In this regard, Trkman & McCormack (2010) conveyed that one of such disadvantages and risks associated with e-procurement system is its inability to integrate with the existing ERP system. Stating precisely, it is evident that e-procurement is also incapable to integrate with the existing procurement system of most of the organisations. This considerably affects the organisational process and its productivity in turn. Furthermore, Vanjoki (2012) commented that e-procurement is highly ineffective while dealing with a larger number of suppliers. It is therefore eminent that in e-procurement system, mostly the organisations do not receive support from a large number of suppliers. This is also one of the significant disadvantages of e-procurement purchasing system, which considerably affects the functionality of modern organisations. In addition, Vanjoki (2012) commented that e-procurement leads to the establishment of complex and unintuitive business processes, which further affects the effectiveness and productivity of corporate organisations. Thus, it is eminent that there are certain considerable disadvantages and risks associated with e-procurement system of purchasing, which discourages corporate organisations to implement the same. Lean Purchasing Disadvantages and Risks Lean purchasing system also has certain disadvantages and risks that have discouraged several organisations to implement it as a purchasing tool. In this regard, Harris & et. al. (2010) commented that at instances when the suppliers are not able to provide the raw materials to the organisation on exact time, it creates a serious issue to the organisation. It largely affects the production process of the organisation. This is largely because such organisations do not have adequate quantity of raw materials in their inventory stock. Thus, it creates a considerable risk to the organisations, which have opted to implement such tools for purchasing. Harris & et. al. (2010) also commented that natural disasters largely affect the organisations that implement lean purchasing in its business process. The reason behind such is that natural disasters halt the supply of raw materials at frequent instances. This largely affects the production process of an organisation. Thus, it is eminent that the organisations, which implement lean purchasing has a considerable risk from natural disasters. Leybourn (2013) also suggested of another disadvantage of lean management. In this regard, it is worth mentioning that the organisations, which implement lean purchasing tool, might not be able to meet the unexpected massive demands from the customers. This is because such organisations do not have adequate quantity of finished products at its inventories. Moreover, such organisations also lack adequate quantity of raw materials in its inventories. This disadvantage of lean management leads to customer dissatisfaction and hence, is considered to imply as a significant risk from the organisational perspective. MRP Disadvantages and Risks Emphasising the same conception, Heisig (2012) suggested certain major disadvantages of MRP system of purchasing. One of disadvantages is the considerable possibility of missing information at the initial stage in the purchasing process. It also creates the possibility of inadequate and improper update on raw materials purchased on regular basis. Heisig (2012) also conveyed of another disadvantage related to MRP system of purchasing. In this regard, it is worth mentioning that it creates the possibility to order placing with wrong or inappropriate quantity of raw materials. Moreover, CSCMP & Tate (2013) suggested that MRP leads to the establishment of even possibility of massive delays in the delivery of finished goods. This is a significant disadvantage from the perspective of corporate organisation, as it creates the risk of losing market share and competitive advantages. The report of Management Association & Information Resources (2013) further suggested that MRP implies to particular risks that tend to considerably affect the business process of the organisations. Organisational failure therefore is more probable when there is a sudden change in product configurations and components. CSCMP & Tate (2013) also suggested that MRP system creates the risk of organisational failure, when organisations have poor flow of information. This poor flow of information is largely evident from product design to production and purchasing. Tender System Disadvantages and Risks Moselle & et. al. (2012) therefore conveyed regarding some of the considerable disadvantages resulting from the tender system of purchasing, which creates the risk of organisational failure at often instances. One of such disadvantages is evident from the barriers to communication between the customers and the suppliers, which reduces customer satisfaction level to a considerable extent. Moreover, Moselle & et. al. (2012) also conveyed that tender system of purchasing involves the use of cheap and poor quality of raw materials. It also involves the use of inefficient labourers. It was in this context that Moselle & et. al. (2012) also commented, at several instances tender system avoids undertaking safety measures, which considerably increases the degree of organisational risks. Strategies for Integrating different Purchasing Tools in the Organisational Process Strategies for Integrating E-Procurement Emphasising the integration or non-integration of e-procurement system, Hines (2014) conveyed that for the effective implementation and integration of e-procurement in organisational business processes, certain defined strategies needs to be followed with due importance. In this regard, Hines (2014) suggested that the initial stage of integrating e-procurement involves specification of all the requirements in the process. It also includes selecting the appropriate supplier through web-based programmes and thereby, gaining the consent of all the participants to the contract. Hines (2014) also suggested of the corresponding process that involves transaction procedures, wherein ordering, receiving and payment is executed. Pablos & Patricia (2012) also conveyed of the final step in e-procurement process, wherein recording of all the information related to the process is accomplished. Strategies for Integrating Lean Purchasing According to Hagstrom & Wollner (2011), there is a specific manner through which integrating lean purchasing is conducted. In this regard, Hagstrom & Wollner (2011) commented that the primary step in the integration process is the integration phase, which emphasises the development of Plan for Every Part (PFEP) related to the organisational purchasing process. The corresponding step is the establishment of purchased-parts market. Chen & Cox (2012) also commented that the subsequent step involves designing of delivery routes, which is followed by the implementation of pull process. This eventually leads to the continuous improvement of the process. Strategies for Integrating MRP Heisig (2012) conveyed that there are three basis steps, through which an organisation can implement MRP in its business process. In this regard, Heisig (2012) suggested the first step in the process includes the identification of the requirements related to the purchasing process. It involves the identification of information related to supplier, its location, and the organisational process that it follows, among others. Kappauf & et. al. (2011) conveyed subsequent steps in the process that involves running MRP and creating suggestions for the effective implementation of the same. In this regard, decisions are considered based on the critical items, delay items, and expedite items. Heisig (2012) also commented of the final step in the integration process, which is subjected to the effective implementation of the suggestion. Strategies for Integrating Tender System According to Panneerselvam (2012), the first step in the tender process involves the determination of its overall suitability in securing organisational objectives. It is worth mentioning that there are four types of tender opportunities, which include open tendering, select tendering, multistage tendering, and invited tendering. Based on the specific requirements of the organisations, it is important to implement appropriate type of tenders. It is in this context that Gasos & Thoben (2012) suggested of the corresponding step in the process, which is the request for tender and is followed by invitation to the tender. Subsequently, Phillips-Wren & et. al. (2014) conveyed that the final steps in the process include the notification and debriefing of the tender, which is followed by effective contract establishment and management. Wal-Mart and its Purchasing System Wal-Mart has witnessed integrating different purchasing tools across nations of its business process. This purchasing tool is eminent from the supply of varied products from large number of suppliers throughout the world. The different purchasing tools used by the organisation comprises of e-procurement, lean purchasing, and MRP. These are illustrated in the underneath subheads. However, it is worth mentioning that the organisation has not witnessed integrating tender system of e-procurement in its business process. E-Procurement in Wal-Mart As stated by Roberts & Berg (2012), Wal-Mart has incorporated e-procurement in its business process to a significant extent. In this regard, it is eminent that the e-procurement system in the organisation has encouraged vendors from different nations to participate. Moreover, Fishman (2006) suggested that the e-procurement system in the organisation has considerably supported the identification of best suppliers across the world. This has further supported the organisation to gain competitive advantages in retail industry. Besides, according to Boone & Kurtz (2012), the organisation has also been highly effective in providing online training to its new suppliers. There are certain benefits of e-procurement system as well that has considerably supported Wal-Mart to improve its business process. In this regard, Boone & Kurtz (2012) conveyed one of the major benefits of e-procurement that Wal-Mart has witnessed with the increase in its global supplier. To be noted specifically in this regard, the organisation currently has over 60,000 suppliers throughout the world. This has been feasible due to the effective e-procurement strategies implemented by the organisation. Moreover, Boone & Kurtz (2012) also commented that the organisation has also experienced high benefits by providing best quality of products at the cheapest price possible. This has been possible due to the effective e-procurement purchasing system within the organisation, which has largely contributed to higher degree of customers’ satisfaction and has subsequently supported the organisation to gain competitive advantages. According to Fishman (2006), Wal-Mart is the world’s largest discount store. The organisation has thus earned such reputation due to its effective integration of e-procurement system in its business process. This has thereafter contributed to the organisation providing discounts on every product. It is therefore eminent throughout the world, where Wal-Mart has its business operations functioning, the organisation has been able to provide at least of 2% to 5% discounts. Notably, Roberts & Berg (2012) suggested that this has been a considerable factor, which has attracted the customers towards the brand at a substantial degree. Roberts & Berg (2012) also cited that the high satisfaction among the customers of Wal-Mart is principally due to its effective e-procurement strategies, which have also resulted into its higher percentage of customer return within the industry. This has eventually contributed to the increasing profit of the organisation. Correspondingly, Roberts & Berg (2012) suggested that success of the organisation is also evident from its over 100 million global customers in every week, which has been feasible due to the effective e-procurement system integrated in the business process of Wal-Mart. Lean Purchasing in Wal-Mart According to Cheng & Lai (2012), Wal-Mart has been considerably effective in integrating lean purchasing system in its business process. According to Cheng & Lai (2012), the effective implementation of lean purchasing is largely due to its effective networking and communication involving its suppliers. Besides, Fishman (2006) also cited that the organisation has been considerably effective in possessing adequate and appropriate human resources. This effectiveness in human resource management of the organisation largely contributes in maintaining effective supplier relationship. Eventually, it has supported the effective integration of lean purchasing system within the organisation. Cheng & Lai (2012) also suggested that Wal-Mart has witnessed some of the considerable benefits from the integration of lean purchasing system. One of those benefits includes the lowered holding cost or the inventory cost to the organisation. Cheng & Lai (2012) also commented that the organisation has witnessed another significant benefit from lean purchasing, which refers to its reduced ordering cost. Correspondingly, it is eminent that Wal-Mart has undertaken the strategy of purchasing some products in small batches with higher frequency. This has correspondingly led to the increase in the product safety. Cheng & Lai (2012) also suggested that the lean purchasing process implemented in Wal-Mart has largely led to the reduction of lead-time, which has significantly contributed to the organisation in improving its effectiveness and efficiency throughout its SCM operations. MRP in Wal-Mart Contextually, Wisner & et. al. (2011) conveyed that Wal-Mart has also been effective in integrating MRP in its business process. In this regard, it is notable that the organisation, in order to enhance the efficiency of its organisational process, considering some of the products that it offers to its customers, has integrated the MRP system in its strategic framework. This MRP system is also based on regional diversities and the suppliers through which, the organisational process executes. Wisner & et. al. (2011) suggested that the organisation has highly benefited itself by integrating MRP, which largely contributed towards sufficing the dynamic customer demands. The organisation has also been highly effective in sufficing the customers’ delivery date, which has eventually led to the satisfaction of its customers. However, Cheng & Lai (2012) also commented that at certain instances, where the MRP system of purchasing integrated in the business process of Wal-Mart has been ineffective, as highly prominent during fluctuations in demand. Conclusions and Recommendations Conclusions From the course of the study, it is eminent that SRM has a significant influence on different purchasing tools used by the modern organisations. Among these, the different purchasing tools include the e-procurement, lean purchasing, MRP, and tender system among different others. SRM also largely increases the effectiveness of these purchasing tools, which is of significant importance from the organisational perspective. Furthermore, the study also reveals that purchasing tools have a significant role in the organisational development, as it largely encourages organisations to improve its SCM bases. It is also eminent from the study conducted above that purchasing tools has a major impact on the operational development of an organisation along with supporting the organisation to undertake effective strategic measurements. From the course of the study, it has also been observed that different purchasing tools have some of the significant advantages and applications along with some of the considerable disadvantages and risks. In this regard, it is eminent that e-procurement largely increases the productivity of an organisation. It also has considerable applications in ERP and MRO. However, e-procurement has certain risks and disadvantages, which mainly includes the complexity of the process. It is notable that lean purchasing is highly appreciative, as it gradually leads to organisational improvement. However, it is considered ineffective during uneven demands. Another important tool is the MRP, which is highly effective during uneven demands and leads to customers’ satisfaction. However, it is considered as ineffective during sudden configuration changes of the products. Furthermore, it is also notable from the study that tender system is considered as highly discouraging, as it leads to poor quality production and unreliable safety measures. However, it significantly supports the organisations in reducing its workload. These above types of purchasing systems have been apparently notable in Wal-Mart except the tender and the organisation has experienced considerable benefits from such. The organisation also has been considerably effective in integrating such purchasing tools to its organisation through effective strategies. Recommendations Considering the advantages and disadvantages of the different types of purchasing tools along with its risks and applications, it is worth mentioning that every purchasing tool has some specific importance. Thus, it is recommended that Wal-Mart that integrated e-procurements, lean purchasing, and MRP systems of purchasing in its business process should continue with the same. This is so because the organisation has derived considerable benefits by integrating these purchasing tools throughout its business process. Besides, it is also recommended that the organisation should implement tendering process in necessary instances. This would further lead to the improvement of organisational efficiency and effectiveness. However, considering the major benefits of e-procurement system that largely suits the organisational process of Wal-Mart, it is recommended that the organisation should continue with its e-procurement strategies in a larger extent. Currently, the organisation has more than 60,000 suppliers throughout the world and thus, managing those large numbers of suppliers through the e-procurement system is expected to be more effective and efficient. 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