Question

Using the Porter and Kramer (2011) approach to shared value, how does local procurement create shared value in the supply chain for a company and for other stakeholders? (maximum 200 words, 5 points) 2) Identify three key considerations or elements to be addressed when implementing local procurement in a company. Discuss using an example from your Assignment 2 case study company or another case. (maximum 300 words, 10 points)

Answer 1

                                         The following are the ways in which the local procurement created shared value in the supply chain for a company and other stakeholders in accordance with the Porter and Kramer approach of 2011 to shared value

· The approach attempted a broader view and extended the concept of shared value apart from corporate social responsibility to the areas of capitalism and markets

· It had a focus on dislocations with current capitalism and emphasis on the inherent social nature of markets.

· It stated that in local procurement, there are more opportunities to reconceive the products and the markets to provide appropriate services and meet the unmet needs

· Thus, the value chain productivity can be redefined to mitigate the inherent risks and thus boost the production.

· A local procurement also would help in enabling a local cluster development by improving the external framework

2) The following are the three major considerations or elements that must be considered while implementing local procurement in a company

· Continual accessibility from the local supplier: This has to be ensured so that the production generation would be continuous and would not be intermitted in between and thus could result in ensuring a better market availability and a stable revenue to the firm.

· Timely availability: It is one of the basic factors of a procurement process and thus decides the efficiency of productivity. Once a procurement is not available on a timely manner, then it would become difficult for the marketing of a product and also would affect the supply chain of the market.

· Affordability of local procurement: The local procurement has to be affordable so that the profit margin and the supply chain management risks are manageable on a day to day basis which would remain a crucial factor in determining the stability of the production of the company.