In Unit 1, we reviewed the main elements of the corporate/business strategy and its implications for the Procurement function. In this unit, we will look more deeply into the Procurement function itself and focus on how Procurement fits within the organisation. We will begin by reviewing issues relating to the organisational structure and how Procurement function can be positioned within this structure. We will then look at the procurement procedures, how to determine and specify the different dimensions relating to goods and services and finally, analyse the supply markets based on the competitive priorities and procurement objectives that we have previously defined.
Unit 2 is made up of 3 sections:
In any group activity, three principal factors largely determine the level of performance attained by the group as a whole: the capabilities of the individuals, the motivation of the individuals and the organisational structure within which the individuals function. This section focuses on the last factor. The organisational structure of the Procurement function influences how procurement executes its responsibilities, how it works with other areas of the organisation, and the skills and capabilities needed by procurement personnel.
This section looks briefly at the traditional purchasing processes and the shortcomings. This leads on to the discussion on technology intervention of the purchasing process in recent times with electronic data interchange (EDI), the pros and the challenges. This section concludes with an overview of the limitations of the new technology applications to small and medium-sized firms, which make up the majority of the world’s enterprises.
This final section examines online sourcing, focusing on discussions with issues relating to electronic catalogues and auctions. This section ends with a brief look at the future trends and applicability of e-sourcing.