ISCOM 361

Purchasing Strategies - Centralized vs. Decentralized

ISCOM 361 - Purchasing and Procurement

Purchasing Strategies - Centralized vs. Decentralized

As a purchasing manager for Preferred Meals, sourcing the right products and service for business operations, is the central bloodline of the supply chain. Our brand lets our customers know what type of business we are, and this can only be successful by purchasing quality products, through reputable vendors. Purchasing though is not an easy task; one must consider vendor sourcing, supply chain logistics, compliance, and strategy. In this presentation, we will discuss our company goals, objectives and the role purchasing plays in our supply chain.

Purchasing Logistics

"Every organization needs suppliers, and no organization can exist without them. Therefore, the organization's approach to suppliers, its acquisition processes and policies, and its relationships with suppliers will impact not only the performance of the suppliers but also the organization's performance. No organization can be successful without the support of its supplier base, operationally and strategically, short- and long-term" (Johnson & Flynn, 2015, 1). To develop a success purchasing department, we must know and understand what our customers need. "Since 1967 Preferred Meals pioneered the development of a school meal program to meet rapidly expanding enrollment, economic and nutritional demands on schools. Today, Preferred Meals is the leading provider of complete, innovative meal solutions—delivering nutritious, quality foods students enjoy—and delivering the cost and service efficiencies schools require.

We aim to capitalize on our efficient production and quality products by expanding the system to meet the requirements of other markets with similar needs; we offer food service solutions that work." ("Preferred Meals", 2018).

To maintain structure in our buying process, we must have a strategic plan, to ensure our supply chain can handle the demand. It starts with hiring the right individuals, that are qualified to and have purchasing competency in the areas of:

· “Strategic Industry Management

· Category Management

· Project Management

· Relationship Management

· Financial Acumen

· Analytical Skills

· Aptitude for Technology

· Results-Focused

· Professionalism” (O'Connell, 2016).

In addition to having a capable purchasing department, we must also develop a purchasing strategy. “Strategic procurement practices complement and provide increased emphasis on capacity generation, carrier management and promoting shipper of choice initiatives to bring customers and carriers together in a challenging environment” (Manning, 2017). Currently, we utilize vendors, and mass produces our products. It is essential that our strategy includes the process of when and how to order, delivery timelines, inventory management, and a backup plan in the event a vendor cannot deliver. The goal in our strategy is to be proactive, not reactive. If we plan properly, we can avoid costly mistakes. This planning starts with our vendors.

Product and Vendor Sourcing in the Supply Chain

Vendor sourcing is key to our success in the purchasing department. "Our goal is to focus on maximizing efficiency across the board so that our clients can use their foodservice budget most effectively. All our school meals are crafted with the goal of achieving a balance between nutritional benefits, great taste, federal menu regulations, and sensible pricing. We achieve a balance of nutritional benefits and great flavor with our initiative to increase clean-label meals, striving to source high-quality local ingredients whenever possible” ("Preferred Meals," 2018). When sourcing our vendors, it is essential we research each company and adequately vet them. This includes checking business references, to ensure they can handle our business, and to verify the quality of products. Cost is another factor, due to the regulations we must comply with our programs. We win our bids based upon lowest price; we need our vendor to understand our price expectations and deliver a quality product within those parameters.

“The objectives of the supply function are to obtain the right materials, in the right quantity, for delivery at the right time and right place, from the right source, with the right service, and at the right price in the short and long term” (Johnson & Flynn, 2015, 45). As we work with our vendors, time is everything. As a manufacturer, our storage space serves a dual purpose; we want to ensure we are forecast each account properly to ensure we can deliver to our clients and receive the appropriate amounts from our vendors. In addition to ordering the right products, at the right time, in the right amounts. It is important to remember that as a Food Service Manufacture we are held to the federal and local health department guidelines. We also are a USDA inspected the facility. As our vendor delivery to our facility, it is vital our team members examine the products, and ensure the vendors also comply with the regulations.

Conclusion

Our brand lets our customers know what type of business we are, and our mission statement sets the tone for our customers. "Small enough to care, big enough to make a difference," means that we care about the products we procure for our customers ("Preferred Meals," 2018). As Food Distributors and Food Service Management company, the market is wide open for our services. The key is to adopt a procurement strategy that will give us a competitive edge in creating a product that helps Preferred Meals stand against the rest.

References

Johnson, P. F., & Flynn, A. E. (2015). Purchasing and Supply Management (15th ed.). Retrieved from https://phoenix.vitalsource.com.

Manning, J. (2017). Inbound Logistics - The Advantages of Strategic Procurement. Retrieved from https://www.inboundlogistics.com/cms/article/the-advantages-of-strategic-procurement/

O'Connell, J. (2016). Morgan McKinley - Top competencies for procurement professionals. Retrieved from https://www.morganmckinley.ie/article/top-competencies-procurement-professionals

Preferred Meals (2018). Retrieved from http://www.preferredmeals.com/about-preferred-meals/