need a response to 2 post

Purchasing & Vendor Management WK 6 discussion

NFP

Question 1

What are the three types of performance benchmarking? Which type is most commonly used by the purchasing function?

Three types of performance benchmarking:

Strategic

Operational

Support-Activity

Strategic benchmarking

This involves a comparison of one firm’s market strategies against those of another. Strategic benchmarking usually involves comparisons against leading competitors, allowing a firm to gain an in-depth understanding of their market strategies.

Operational benchmarking

Is a process that the purchasing functions follows when it performs benchmarking comparisons. Firms should benchmark functional activities that provide the greatest return over time.

Support-activity benchmarking

During this process, support functions within an organization demonstrate their cost-effectiveness against external providers of the same support service or activity.

Question 2

Discuss the reasons why measuring and evaluating purchasing performance has historically had certain problems or limitations. Do you think the purchasing function should increase or decrease its effort to measure performance? Why or why not?

Reasons for problems with measuring and evaluating purchasing

Companies generally have large information without proper description.

The information used by middle level-executives is at times inappropriate due to many reasons inside and outside of the organization.

Small and medium sized firms have problems related to measures and data which are short term instead of long-term focused.

Many measures drive individual behavior. If purchasers are measured as per the number of buying orders, they will split orders among suppliers to produce more buying orders. Thus affecting.

Purchasing function should increase its effort to measure performance because it helps in achieving the desired objective efficiently. In addition, this also helps in reducing overall cost for the company and makes efficient utilization of available resources.

Question 6

Discuss the different uses a manager has for purchasing and supply chain performance data.

Performance measurement: is a process of collecting, analyzing and reporting data related to the performance of an individual, organization or a system.

Manager can utilize the purchasing and supply chain performance data to accomplish the following:

It would help to establish the strategic goals and objectives of an organization.

Organizations can utilize this data to predict their sales volume. It would help them to determine their production rate.

It would enable the company to address their market demand and gain competitive advantage in the market.

Hence, purchasing and supply chain data would enable a manager to determine its production and sales strategy.

D F

Question 3: What were the benefit of developing performance measures that focus on cost versus purchase price?

The benfits to this are knowing and being able to perform break even analysis. This may not be to simply assess profit margins, it is more inline of understanding where the cost vs the price is. In other words firms may be willing to take a loss on one product to entice consumers to buy another. The reason for this is the profit margin. There are several modeling techniques that can be used. When I worked retail, seasonal models were huge to push and move product. We may sell the Christmas lights cheap, but the extension cords would have a markup to make up the difference. Understanding the difference between cost and price and being able to evaluate the affects those markers have on performance allows for adjustments and to calculate longterm strategies

Question 7: Why do you believe there has been so much emphasis on technology in supply management in the twenty-first century?

To me this comes down to a couple simple words. Speed and effciency. Throughout the study of Logistics, technology has brought on a new sense of speed that allows for companies to operate faster. Lets be honest human movement, computation and skills have limitied capability. Advancement in these skills are no growing with the rate of technology. Speed has direct corelation to profits and it has massive impacts on customer satisfaction. Efficiency is the marker for escaping mistakes. The less waste you have the more money you make. There is no doubt as technology and automation come more into the fold, effciencies can be measured in seconds as opposed to hours.

Question 10: Imaging walking into the purchasing office of the future. How might you go about completing your tasks for the day using future information technologies?

When I think of this I think of a completely near real time environment. Where a purchasing department will operate in a wireless, RFID world. Inventories will change as items come in and go out. Online ordering will remove items that need to be selcted and shipped. Purchasers will have systems to auto order high volume products. Payments will all take place across wireless networks that will show managers the real time cost data of day to day business. Thus, being able to change price point to keep competitve edge. Technology will be at the forefront of everything. There is not doubt this will require massive infrastructure from a IT perspective, alsong with massive security updates to ensure firm and consumer data is maintained in safe environments. The purchaser will be able to work remote and on the fly. There will not be a need to occupy a desk.