Question

Explain at least four strategies were proposed to enhance the efficiency and effectiveness of its global purchasing activities and supply chain management .

Answer 1

Effectiveness

Effectiveness can be defined as the ability to perform or produce something fruitful for the growth of the organization. When someone says effective, it means he/she has an expectation of result from a particular operation. Generally, an organization wants the objective to be attained with complete effectiveness and efficiency.

Efficiency

Efficiency is generally derived by the calculation on time, efforts, and resources a task has taken. An organization always targets to minimize the waste of time, efforts, resources while performing operations.

Global Purchasing and Supply Chain Management

All the transactions happening between two or more countries from procuring goods and services can be defined as global purchasing. The global purchasing activities are defined as "IMPORT" and "EXPORT" activities.

Supply Chain Management can be defined as smooth movement or flow of goods and services for uninterrupted operations. All the operations in making an end product from raw material is an example of supply chain management.

Strategies to Improve Efficiency and Effectiveness in Global Purchasing and Supply Chain Management

- Purchasing Sense and Human Resources

The ability to do right and needed purchase play the most crucial role in saving costs while doing global purchase. This includes forecasting the customers' needs and procures goods and services according to that. The determination of the right time of purchase helps is uninterrupted operations and improved supply chain management. Human resources are the persons or employees who are responsible for purchasing all the goods and services from other countries. They get hired based on their skills and qualifications to bring effectiveness to the organization.

- Developing Good Relationships with Suppliers

Developing and maintaining good relationships with suppliers is key to survival in International Business. It saves time in ordering products and also helps the company in getting products with partial payment due to trust among each other. This certainly improves the efficiency of the organization and brings effectiveness as well. Good relationships can be developed by regular orders to the same supplier, timely payments, treating the supplier friendly, etc.

- Staying Updated with Technology

Bringing new technology can help an organization in minimizing the costs and time to be used in operations. The introduction of new machinery in an organization can help to reduce the physical work of employees which ultimately increases the effectiveness of their work potential. Also, the new technology improves the quality of work in less time which improves the efficiency of the organization. A business should always search for the best technology available in the market and apply it in the operations to attain the objective effectively and efficiently.

- The ability of Decision Making

Making timely and right decisions can help the organization tackling any barrier. The top-level management of an organization or the person responsible for making crucial decisions should be an experienced one. Decisions regarding purchasing, technology, use of resources, compensation of employees should be taken after deep analysis or forecasting of the future events that can happen. Accurate and Correct decisions help the organization in getting both effectiveness and efficiency and also ensures smooth supply chain management.