Procurement and Supply Chain Management - Assignment Example

Procurement and Supply Chain Management Procurement and Supply Chain Management Supplier selection is a significant factor for anyindustry that is functioning either as a large or medium-scale business (Giannakisa & Louisb 2011, p. 23). Suppliers mainly provide raw materials, semi- or finished products to a firm in order for them to perform more operations on the product or assemble the final good. For instance, in the scenario of a cement industry, we will have suppliers how supply such raw materials as lime among others to the company in order for them to produce cement and in the case of an automotive manufacturing company, we have original equipment manufacturers who supply them with the needed materials to manufacture those vehicles (Giannakisa & Louisb 2011, p. 23). In the company I work for, we use the supplier selection criteria, which will be explained in the next section. It has been present since the start of the company no matter the new trends that have been emerging of late. This supplier selection is a significant section in our supply chain management. Risk management of any supply chain is an overly complicated subject. Understanding how it works will be very significant to identifying a range of risks that are in the current system and making the necessary recommendations on which of these issues are a priority and how they can be reduced (Giannakisa & Louisb 2011, p. 23). This paper will provide a review of the supplier selection process and make recommendations on how it can be improved. It will use the risk analysis and management framework to identify the risks in the process and make recommendations on how the issues found there can be reduced. The paper will also recommend how to select sustainable suppliers whatever the means. Our supplier selection process involves nine elements considered very crucial to the organisation. The elements include (1) specific process capabilities, (2) tough safety procedure, (3) competitive pricing, (4) constant quality improvement, (5) financially stable organisation, (6) stability, (7) culture, (8) alliance experience, (9) strong references. Just a brief explanation of these steps. The company looks at the specific strengths that will ease the process of supplying the goods. This is whether they have the needed infrastructure to supply the goods efficiently such as the right trucks among others. The tough safety procedure includes whether the safety of the workers are guaranteed and whether the goods will reach the business unharmed. Competitive pricing discriminates the supplier in terms of price, who is cheaper and reliable (Giannakisa & Louisb 2011, p. 24). Constant quality improvement dictates the supplier on how they will add value to the company through supplying them with the needed goods. This involves ensuring the good arrive on their needed destination on time (Tahriri, Dabbagh & Ebrahim 2014, p. 1319). Financial stability of the supplier is also important judging by the fact that these suppliers use the finances to ensure the continuity of the business. Issues such as culture and also reference work for to the advantage of the supplier as they are also used to build the bond between the business and the supplier (Giannakisa & Louisb 2011, p. 24). Alliance experience is how well the supplier is known by firms that are alike to our firm. The risk criteria include indentifying the assets at risk from suppliers and knowing the value of assets, as well as the criticality of the assets, security requirements of the suppliers according to their priority and vulnerabilities from the suppliers and also from the external environment (Tahriri et al. 2014, p. 1319). Our business security goals include ensuring that our assets reach our venue safely and that they are carried to their exactly usage location without any harm plus the safety of our workers are ensured while the item is being carried to its usage location. The supplier must use special carriage means to ensure that these goods reach the destination in good condition (Giannakisa & Louisb 2011, p. 24). If maybe the goods require refrigeration, then the supplier must use vehicle with refrigerated compartments in order for the goods not to go bad while in transportation. If maybe the goods are fragile, then the supplier will be required to use soft materials that will prevent the goods from breaking just in case they hit any surface during transportation (Tahriri et al. 2014, p. 1319). They also recommend special vehicles that can transfer the goods from the unloading area to their area of usage safely. They also agree that just in case any of their endeavours lead to any injury of any our workers or destruction of the goods, then they will be the ones to bear the consequences. The risk classification model includes various risk factors that are ranked in terms of high, medium or low and also the mitigation status. These risk factors include data center power outage, data center fire, equipment failure, voice network failure, data network failure, natural disaster service interruption, criminal activities, human errors, software errors affecting integrity, business system change control and unauthorised intrusions. When it comes to arranging these risks according to their priorities, it will go as follows; (1) power outage, (2) equipment failure, (3) voice network failure, (4) data network failure, (5) human errors, (6) criminal activities, (7) software errors affecting integrity, (8) unauthorised intrusions and (9) natural disaster service interruption. However, the suppliers have back-up generators that ensure power failures do not affect their operations and keep them online every time. They also employ top class equipment, which hardly fail or crush even when performing complex operations. There has been some instances when voice and data networks have failed and reaching the suppliers has been a problem thus slowing down communication. However, human errors are minimal, criminal activities and unathorised intrusions have not been a major issue. Finally, even though, natural disasters hardly occur in this region, there is a major doubt whether the suppliers are prepared to face natural disasters such as fires. In order to elevate these risks, the suppliers need to ensure that they use reliable networks that will not fail them also work to ensure that human errors are minimal (Verdecho 2010, p. 304). For the network problems, a firm should look for a supplier who has chosen to invest a lot in setting up a reliable network from a well known network company. This will at least show you that the supplier is eager to make his/her communication the best. Also, a firm should look for a supplier who have invested a lot in training his or her employs to reduce any kind of risk that might affect the operations of the people who they are supplying to (Verdecho 2010, p. 304). When it comes to selecting sustainable suppliers, it is important to bear in mind that today, companies and business processes are becoming more and more dynamic. The stakeholders for any firm comprise of the customers, government, competitors and suppliers (Bahadur 2012, p. 78). These stakeholders are showing more concerns towards technology, environment and the public. Tendency of the organisation to transform their supply chain in an effort to ease costs and be in a better position to serve their clients and transformation in environmental needs and public pressure on firm are a new trends in the business field. Such trends offer a chance to exceed environmental expectation of customers and governments through supply chain collaboration (Bahadur 2012, p. 78). These, for instance, include the capability to see supply chain affiliates pledge to ecologically friendly practices (Bahadur 2012, p. 78). Therefore, any supplier procurement process should bear these new trends in mind. How will the business make the government and its clients know that they are environmentally friendly? This starts by selecting supplier who consider environmental friendliness in their endeavours through to the process of green promotion. References Bahadur, G 2012, Supplier risk assessment, Information Security Consulting, Florida, OL. Giannakisa, M & Louisb, M 2011, A multi-agent based framework for supply chain risk management, Journal of Purchasing and Supply Management vol. 17, no. 1, pp. 23–31. Tahriri, F, Dabbagh, M & Ebrahim, N A 2014, Supplier assessment and selection using fuzzy analytic hierarchy process in a steel manufacturing company, Journal of Scientific Research and Reports vol. 3, no. 10, pp. 1319-1338. Verdecho, M J 2010, An approach to select suppliers for sustainable collaborative networks, IFIP Advances in Information and Communication Technology vol. 336, no. 45, pp. 304-311. Print. Read More