Question

Business is becoming more and more competitive, and organisations have realised that purchasing and Supply Chain Management (SCM) are key factors in satisfying customers. Buyers and supply chain managers can contribute significantly to the organisation's profits. An organisation can spend as much as 50% of its sales revenue on purchasing parts, services, components and raw material. Therefore, efficient, mutually beneficial and constructive relationships with suppliers are very important to the organisation's short-term financial position and long-term competitive power.
1. The activities and objectives of different organisational buyers will dictate their purchasing needs and behavioural patterns with regard to purchases. Discuss the three types of organisational buyers. (10)
2. List and explain TEN criteria used to evaluate suppliers. (20)
3. Four critical factors have been identified for the successful implementation of a software-solution-driven SRM solution. Discuss these factors. (10)
4. Differentiate between constructive and competitive negotiation. (10)
5. Discuss the guidelines for maintaining positive supplier and customer relationships. (10)
Project Guidelines
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Answer 1

Answer 1.
Three Types of organisational buyers are resellers ,producers and Government agencies.
1. Resellers are those buyers who buy a particular commodity to again resell it to the customers. They sell the product and gain profit by reselling them.
2. Producers are those people who produced the material and buy the raw materials for producing the products.
3. Government agencies- government Agencies have Complex purchasing policies but they also act as buyers for most of the products. For example in India government purchases some agriculture material from farmers and re sell it to people.
Answer 2.
Suppliers can be evaluated on the basis of following-
1. Communication- It should be clear that who is the contact person. and what is the proper mode of communication to place the order.
2. Competency- The supplier should be able to provide competitive pricing of the product. They should be a truly expert in the product they are supplying.
3. Capacity- the supplier should be able to provide the material as per the demand made that is it should be capable of supplying the product in the right quantity.
4. Commitment- the supplier should make commitment be able to fulfill them.
5. Control- supplier should have proper control over its supply chain. The delivery of goods should be in control.
6. Cash- the supplier should be in good financial position and be able to provide goods on credit.
7. Cost- the cost of the supplied product must be reasonable. And it should also stand out in competition to the pricing of other companies.
8. Consistency- the supply must be able to supply the product regularly. Even if the orders are fluctuated there should be a consistent supply of goods.
9. Culture- the company should have a a good culture ,speed quality excellence ,innovation should be seen in the culture.
10. Cleanliness - that suppliers production method should be neat and tidy. It should produce the product in Environmental friendly way and the employee should also treat the people ethically.
Answer 3.
4 critical factors for successful implementation of Software Solution driven SRM solution are-
1. Communication- Success always starts when there are clear cut vision of the goals. Solution should always been driven by business needs and not by technology.
2. Alignment- sometimes the problem arise that the software do not align with the organisation. If the user of the software is not getting value by using it. Then the software usage is reduced
3. Mobility- the option to be able to use the software from any device is essential.
4. Flexibility- it is very important that the software must be flexible and adapt to future needs of the company
Answer 4.
Constructive negotiation is also called as collaborative negotiation. This type of negotiation keeps the relationship first .It values relation more than any other thing.The relationship in negotiation is very important element. The relationship is more important while seeking and finalizing the agreement. Equal and fair agreement are the two important components of collaborative negotiation.
Competitive negotiation is a type of negotiation in which one person wins and other person loses. In this the negotiator goes up to an extent as to, whatever it it takes to win the negotiation. For competitive approach will always increase conflict. It is generally considered as destructive approach in negotiation.

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