Question

The Purchasing procedure of ABC Co. Limited ABC was a medium-sized Hong Kong-based company with two manufacturing plants in China, one in Dongguan and the other in Shanghai with employees of 3,000. The company was manufacturing micro-wave ovens in three different product lines including oven-P, oven-Q & oven-R series. While P & Q models were for its domestic customers, R models were designed for its overseas clients. The three product lines were targeting at different market segments. 40% of their components were nevertheless shared among the three product series and 60% of the components were common to P & Q models. Basically, the components were divided into several categories including the casing, the heater, the glass front door, the electronic control, the magnetron, and the small mechanical and plastic parts. The following was the generic purchasing procedure that ABC was adopting to control its purchasing activities. 1. User department (e.g., Production of oven-Q) issued a Purchase Request (PR) to Purchasing Department for a component W (e.g., light bulb). 2. Purchasing Department negotiated with the supplier about the price of manufacture of W. 3. ABC issued a Purchase Order (PO) to detailing the specification of W and the required receiving date. 4. Upon the receipt of order, Receiving Department checked the material against PO and issue Receiving Report (RR) to Incoming Quality Control (IQC) Department 5. IQC checked in accordance with the testing procedure TEST-W101~108-MILSTD and issued a Testing Report (TR) to Purchasing Department to close the order. 6. Accounting Department issued a cheque to the supplier upon received an invoice from it.

Questions: 1. Identify the potential disconnects of the purchasing procedure

Answer 1

The potencial disconnects of the purchasing procedure is the components have been divided into various categories which is ABC and different analysis are being interpreted over here

The top six challenges facing procurement

a)The evolution of procurement means that the function's success is no longer just about sourcing services and reducing cost. ...

b) Risk management. ...

c) Reputation and brand image. ...

d) CSR. ...

e) Becoming a customer of choice. ...

f) Centres of Excellence. ...

g) Stakeholder engagement.

The incoming quality purely determines the purchasing procedure and the sales procedure of all the different commodities Public procurement is increasingly viewed as having important potential to drive innovation. Despite this interest, numerous barriers prevent the public sector from acting as an intelligent and informed customer. This paper seeks to understand how barriers related to processes, competences, procedures and relationships in public procurement influence suppliers׳ ability to innovate and to reap the benefits of innovation. We address this by exploiting a dedicated survey of public sector suppliers in the UK, using a probit model to investigate the influence of structural, market and innovation determinants on suppliers׳ perception of these barriers.

The main barriers reported by suppliers refer to the lack of interaction with procuring organisations, the use of over-specified tenders as opposed to outcome based specifications, low competences of procurers and a poor management of risk during the procurement process. Such barriers are perceived most strongly by R&D intensive organisations. Our results also indicate that certain organisations, particularly smaller firms and not-forprofit organisations, encounter greater difficulties with innovation arising from the procurement process, for instance in relation to contract size, lack of useful feedback and communication of opportunities. Government procurement policies are queried in light of the findings.