Purchasing Must Become Supply Management
Article Review 2: Purchasing Must Become Supply Management
Oluwaseyi Omokanye INSS 630 Dr. Abby Spring 2013 * Introduction Many companies are finding purchasing to be a routine business function and face challenges concerning purchasing decisions involved in their supply chain which often includes accepting or ignoring disruptions and is managed with annual negotiations with suppliers or sources. Years ago, purchasing managers developed skills in an environment based on stability. Today, however, companies are facing issues such as threats of resource depletion, raw materials scarcity, political turbulence and government intervention making it difficult to adjust. Worldwide environmental and economic changes as well as fluctuations in demand and supply patterns have caused organizations to accept that their days of no surprises were over. Also, realizing their purchasing departments should adjust quickly has caused companies to avoid falling behind and incurring more expenses. Particularly, disruptions in the supply chain have become one of the major causes of failure for corporations averaging approximately $15 million in losses. This article addresses the following question: “How can companies guard against disastrous supply interruptions and cope with the changing economics and new opportunities brought on by new technologies? Also, what capabilities will a profitable international business need to sustain itself?” The article answers these questions by providing step by step advice to top managers on how to effectively manage its supply management and also provides solutions and strategies on properly identifying and managing their own supply weakness along the supply chain. The article also suggests that manufactures switch perspectives in order to ensure long term availability of critical materials from that of purchasing (an operational function) to that of supply management (a strategic one). *
Oluwaseyi Omokanye INSS 630 Dr. Abby Spring 2013 * Introduction Many companies are finding purchasing to be a routine business function and face challenges concerning purchasing decisions involved in their supply chain which often includes accepting or ignoring disruptions and is managed with annual negotiations with suppliers or sources. Years ago, purchasing managers developed skills in an environment based on stability. Today, however, companies are facing issues such as threats of resource depletion, raw materials scarcity, political turbulence and government intervention making it difficult to adjust. Worldwide environmental and economic changes as well as fluctuations in demand and supply patterns have caused organizations to accept that their days of no surprises were over. Also, realizing their purchasing departments should adjust quickly has caused companies to avoid falling behind and incurring more expenses. Particularly, disruptions in the supply chain have become one of the major causes of failure for corporations averaging approximately $15 million in losses. This article addresses the following question: “How can companies guard against disastrous supply interruptions and cope with the changing economics and new opportunities brought on by new technologies? Also, what capabilities will a profitable international business need to sustain itself?” The article answers these questions by providing step by step advice to top managers on how to effectively manage its supply management and also provides solutions and strategies on properly identifying and managing their own supply weakness along the supply chain. The article also suggests that manufactures switch perspectives in order to ensure long term availability of critical materials from that of purchasing (an operational function) to that of supply management (a strategic one). *