Question

Case Study in Procurement

Assignment:

Please Find a real case study (Do not assume) on the subject of Procurement that involved significant and costly mistakes.

Prepare a (3-4) page report on this experience including the following:

1. What was the nature of the procurement including the organization that conducted it?
2. Who was involved in the procurement?
3. What was the process followed (briefly)?
4. Critique the procedure indicating what went wrong and how costly it was.
5. Suggest necessary improvements

Answer 1

Answer:-

Procurement is the process embraced by the purchasing group after buy order has been put together by the representative/requester, which involves the means finding and selecting the merchants which can full fill the prerequisite of the requester. as it were buying or obtaining products or administrations from others is called procurement.

scenario

We can express a scenario that a transportation firm which gives taxi administrations to its clients ie. ABC taxis. It requires 10 vehicles to extend their administrations in a metro city. For this process the buy demand is endorsed by the fitting head and the procurement process begins. The Procurement group, procurement head who endorses buys, and finance division which favors and pay for the buys and the outside merchants are involved in this process.

Procurement process

Recognize the necessity - In here the prerequisite for vehicles are the goal of the procurement group.

Searching for the sellers - The procurement group lead a market scan for the merchants which is skilled to full fill the prerequisite.

Selecting the seller - the merchant is chosen based on Price, Quality of administrations gave. The greater part of the organizations incline toward their past history with the merchant.

Negotiating on cost and installment term - If the cost and installment term is ideal by the association's standers at that point moves to following stage.

sending buy request - Its the process of sending the merchant PO which states particular of the item required, for example, amount, cost and so forth.

Products receipt - it involves receipt of merchandise requested.

Checking merchandise, Invoice receipt and installment - In this process the products got are approved with the request and if its equivalent the installment initiates.

The ABC taxis obtains 10 seven situated diesel vehicles which was sold on a markdown because of the most recent government standards banning BS4 vehicles. according to the administration guidelines because of contamination control new vehicles ought to be to BS6 compliant.The spending plan assigned was surpassed because of the adjustment in vehicle size yet because of the rebate the administration endorsed.

However, after the audit it find that the traffic surge in the city is high and the clients favor little vehicles because of its simplicity of movement in the city. Likewise the new gen vehicles were cross breed in nature which run on power and petroleum. it will decreases the expense of running.

Mistakes happened in this procurement process ;

Varieties in spending plan allotted - The buy ought to be gone according to the monetary allowance designated. In here motivation to find an enormous vehicle will cause increase in the operating expense on future. over utilization of spending plan allotted will impact different buys and investments.

Not considering changes in innovation - The specialists ought to consider upcoming changes in innovation and look forward how it should impact the benefit of the business.

In the above scenario, on the off chance that they have been chosen crossover vehicles, it will lessen the operating expenses and will bring about positive result on income.

Not considering Corporate Social Responsibility - By using BS6 half breed vehicles, the contamination can be decreased and which may be an objective in the CSR of the firm. A business ought to think about its duties towards the general public on its tasks.

Poor statistical surveying - Due to absence of information about the city conditions the business overlook the way that clients incline toward little vehicles over enormous ones. Its another issue for this situation scenario.

Conclusion

On the light of above scenario of the firm ABC taxis the financial issues can be kept away from by severe arrangement on how the monetary allowance ought to distributed in the purchasing process.even each significant choices budgeting is one of the significant factor that should be thought of.

The dependability of a procurement group, which expresses the group is prepared to settle on such significant choices is something else to be consider.

Suggestions

Before starting each procurement process the group ought to know about the particular necessities. the groups ought not take fast choices based on first supposition likewise it should be think about upcoming changes in the innovation and markets.

The relationship with the sellers is another factor which will impact the cost and after deals administrations.

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