Purchasing and Supply Chain Management
QUESTION
In no more than 2,500 words, using a structured essay format, explain how the need for firms to recognize supply chain management as a philosophy and a source of competitive advantage has led to significant changes in the purchasing role amongst public and private sector organisations.
INTRODUCTION
One of the fundamental questions facing modern organisations is how to achieve and sustain competitive advantage (Rumelt et al 1994) within an increasingly fast moving environment. Supply Chain Management (SCM) is critical element of model business strategy and globalisation trends where Organisations can create significant competitive advantage. SCM has many definitions but is essence is ‘the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole’ (Christopher, 2005). Therefore the knowledge and understanding of the various processes involved in SCM are critical in the efficient controlling the supply chain (Davis, 2010). The purchasing process within SCM has thus become a central part with a role “to purchase the RIGHT QUALITY of material, at the RIGHT TIME, in the RIGHT QUANTITY, from the RIGHT SOURCE, at the RIGHT PRICE” (Baily, Farmer, Jessop and Jones, 2005)
This paper discusses the evolution of SCM, why it had become central to competitive advantage and the developments it has forced on the role of purchasing.
Quinn et al (1990 p79) state that organisations, “need to ask, activity by activity, are we really competitive with the world’s best here?” Quinn (1992) and Quinn and Hilmer (1994) continue the theory by arguing that activities in the organisations supply chain can be described as services. Each service can be examined from a customer’s perspective to ensure that the organisation knows how to perform better than anyone in the world. If it cannot perform to this high standard then it should be outsourced. Porter (1985) reinforces
In no more than 2,500 words, using a structured essay format, explain how the need for firms to recognize supply chain management as a philosophy and a source of competitive advantage has led to significant changes in the purchasing role amongst public and private sector organisations.
INTRODUCTION
One of the fundamental questions facing modern organisations is how to achieve and sustain competitive advantage (Rumelt et al 1994) within an increasingly fast moving environment. Supply Chain Management (SCM) is critical element of model business strategy and globalisation trends where Organisations can create significant competitive advantage. SCM has many definitions but is essence is ‘the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole’ (Christopher, 2005). Therefore the knowledge and understanding of the various processes involved in SCM are critical in the efficient controlling the supply chain (Davis, 2010). The purchasing process within SCM has thus become a central part with a role “to purchase the RIGHT QUALITY of material, at the RIGHT TIME, in the RIGHT QUANTITY, from the RIGHT SOURCE, at the RIGHT PRICE” (Baily, Farmer, Jessop and Jones, 2005)
This paper discusses the evolution of SCM, why it had become central to competitive advantage and the developments it has forced on the role of purchasing.
Quinn et al (1990 p79) state that organisations, “need to ask, activity by activity, are we really competitive with the world’s best here?” Quinn (1992) and Quinn and Hilmer (1994) continue the theory by arguing that activities in the organisations supply chain can be described as services. Each service can be examined from a customer’s perspective to ensure that the organisation knows how to perform better than anyone in the world. If it cannot perform to this high standard then it should be outsourced. Porter (1985) reinforces