Contents

Q. 1 Procurement has long been criticised for having a tactical, short-term focus although there is an
increasing focus on the medium and long term..........................................................................................1
Q-2 The challenges facing procurement and supply management in the post COVID‐19 pandemic..........3
Part-B...........................................................................................................................................................6
Q.1 Discuss the importance of public procurement as a tool for economic development. (about 300
words).........................................................................................................................................................6
The importance of public procurement...................................................................................................6
The importance of spend analysi..........................................................................................................6
The importance of procurement to city economies................................................................................6
Maximizing benefit through procurement..............................................................................................7
Q- 2. How “under-represented” business owner can engage with public procurement opportunities......7
Q-3 A. Estrange or engage with the public procurement opportunities......................................................8
B. The public procurement best practices and compete for profitable work.............................................9

Q. 1 Procurement has long been criticised for having a tactical, short-

term focus although there is an increasing focus on the medium and long
term.
The government information technology is upgraded along with the advancement of
procurement especially in healthcare sectors. Long term procurement is a challenging issue as it
needs to have new policy in state, region, local to federal. Level. However, short-term approach,
some human service agencies are able to think to start the current existing process under their
convenience. Human services agencies mostly know their requirements; thus, they find the most
suitable vendor who can fit in with their needs and can structure their contract effectively. The
procurement process, contract and budget can be a twisting thing in hierarchical organization.
The other challenging thing is the structure of procurement. Existing technology of procurement
procedure may have some unnecessary delays towards innovative projects. Some believe that
implementation of state government process is inefficient and takes too much long time. In order
to fit in current business environment, the old fashion of one-size-fit-in- all approach of
procurement isn’t enough. In order to achieve long-term approach, strategic sourcing is a major
part. The major objective of procurement is to achieve best value of money on all procured
goods, works and services. To provide corporate focus to procurement. To find the detail way to
reforming and improving procurement function. To encourage long-term thinking and
commitment to strategic procurement. To reduce the cost of procurement process and ensure the
process of procurement. To provide due consideration to of environmental concerns which is
green procurement.

Strategic sourcing procurement is a long term a process driven by an identified goal which
includes current and potential sourcing opportunity, accessing their value and relevance for long
term goal, formulating and applying action plan, critical commodity and supply network. It also
includes analyzing market trends and take precaution for supply. It usually base on cost effective
solution along with sufficient legal protection. It acquires expertise and engage with
stakeholders. It mainly encourages innovation and develops meaningful performance incentive.
It focuses on external view and it is a value center approach. It emphasizes on benchmarking
process.

Unlike strategic sourcing, tactical sourcing fulfils the state need for example, free tax purchase
requisition. Pricing and delivery schedule are main criteria in tactical sourcing. In here, purchase
order includes terms and condition of supply. In tactical procurement sourcing, they use up-front
decision making. Smart procurement is a key to access to a fine product and service.

Operational procurement tends to be a short-term procurement which only focus on internal view
and cost center approach. It also has performance management.

. Long-term contracts focus on cost, quality and service, minimum revenue and balanced score
card approach. Mid-term contract focus on benchmarking of cost and output based pricing
model. Short-term contract based on contracts, frequent negotiations and price change
measurement.
Short-term focus could lead procurement to ultimately compromising the long-term success of
the firm and even the supply chain. The current financial crisis has the potential for procurement
to demonstrate its real strategic contribution. The short-term suppliers are under working
pressure and they cannot access the credit. Thus, are under the risk of liquidation. if they are the
suppliers whom the buyers are depending too much will be at risk too. To avoid such risk, the
buyers can do multi sourcing or dual sourcing. If the buyer is clear that primary short-term
objective is cost reduction, the buyer’s knee-jerk reaction is to put more pressure on suppliers
and expect them to sharpen their pencils. if the buyer put pressure on suppliers and these
suppliers need to continue business. So accepts the need to price on marginal costs in the hope
that fixed costs can be recovered from more benevolent buyer who are taking a longer-term
perspective. This also put pressure on the supplier’s agent to match their sales volumes targets.
So, the supplier is selling with non-sustainable price which isn’t economically viable. With both
the supplier and buyer adopting short-term strategies, a long-term consequence could be an exist
of a supplier from the market. Leaving a long-term monopoly and shift of power of buyer to the
supplier. At worst, the outcome could be a failure of the buyer organization to source what is
required to satisfy the customer.

When signing long-term contract with supplier, it is important to take partnership approach. The
procurement approach you adopt must have strong benefit for both sides. Risk management is a
vital role in choosing suitable supplier in order to avoid future problem in emergency matter.
Reliability of the supplier is also important. Checking the background history of the supplier not
only for the quality of products but also delivery, service, support and communication.

To build long-term business outlook, focus on co-creation and joint innovation, high level of
relationship, total cost of ownership approach are key things to build mature partnership within
your supplier

Quality is also the most important part of choosing supplier. To have long-term relationship with
supplier, sustainable and consistent of quality is a key factor. Checking the financial security of
supplier to have enough cash flow to survive for long time duration is also to be considered in
choosing supplier to have long-term procurement. It is important to ensure the procurement
strategy to be in line with the achievement outcome of your organization. Making sure of your
organization’s nature to check whether to adopt short-term or long-term approach. It is also
important to ensure to pursue a strategy which will create the right market structure when
economic recovery has been achieved.

Q-2 The challenges facing procurement and supply management in the post
COVID‐19 pandemic

The crisis of the coronavirus has brought unexpected fluctuation and fragility in modern supply
chain field. Most countries are experiencing devastating economic impact due to the crisis. As it
hit global economy faster than we expected, multinational companies experience shock of supply
and demand as most countries make people stay home. Only basic products and food products
are purchased by consumers which have strong impact on supply chain process. The decline of
domestic and international trade worsens week by week since the beginning of February to
current moment. Besides, every lockdown area has been experiencing downward slope of trades.
It appears some challenging issues such as taking longer to be able to settle invoices. Although a
faster payment trend was being applied previously. In 2019, it took 36.7 days in business field to
settle invoice and 36.8 days in 2018. In the beginning of 2020, it was 37.4 days of payment terms
to settle. The slowing down of new order affects the process of supply chain and hinder the
invoices behind. Even after the lockdown, although the factories are reopening, customers seem
to have lack of interest in buying unless it is basic items. Although some countries release
lockdown, their counterpart trading partner countries are still under lockdown. It also has great
impact on their supply chain process.

Countries around the world has experienced the vulnerability of supply chains which build on
lean manufacturing principles. For instance, in health care sector, the cost-effective masks and
other protective equipment were made in cheaper cost. The effect of lockdown in key
manufacturing areas have problem with supply chain as manufacturers have to struggle to rotate
the supplier base. As a result, in future, the global firms will probably diversify their supply
chains instead of depending on a particular country. Consequently, manufacturing hubs such as
Mexico, Vietnam and India will probably have the opportunity from that case. To decentralize of
manufacturing capacity, some companies bring their production to home and it grows like
flexible automation and small batch production. This is a cost cutting way to bring supply chain
to alive. In such case, policymakers might force to manufacture in the country or particular
places.

To build stronger and smarter supply chains with speedy recovery, digitalization and diverse
sourcing are the key factors. Although there are high-speed advancement in technology, the
relationship between consumers and sellers are still remaining in paper-based. Converting the
paper-based relationship into digitalizing is a fundamental key factor to have well-structure
supply chains as it saves a lot of time and energy. Thus, this current crisis bring advantage of
converting outdated process into digitalizing. By creating smart supply chains can be a weapon
to protect future supply chains crisis as well as benefits to build global trade.

Globally, today’s manufacturing process has been more advanced at the same time, more
complex. The ingredients or subcomponent to from a final product needs to be similar or almost
same globally. The raw materials used to manufacture these subcomponents must be imported
from other part of the countries or across the continents. Furthermore, the finished or almost
finished goods will be transported to other places. If the supply chains process is being disturbed,
the import, export and manufacturing process will be in trouble. For instance, China exported
(APIs)active pharmaceutical ingredients to India. During COVID-19, Indian government banned
importing (APIs) from China. As a result, India’s pharmaceutical firm is having a difficult time
to maintain its export figures. Consequently, there will have a shortage on medicine globally as
India is the biggest common and collective medicine supplier in the world.

The other challenge is about procurement in sourcing organization. Earlier before pandemic, the
process of lower cost production has been very popular. However, during pandemic period, the
shortage of goods and demand hit the distribution rate. At the same time, distribution sector has
been experiencing challenges about direct distribution, proper and responsive allocating, staffing
at warehouse issues. The unusual impact on retailing is also noticeable. During lockdown period,
people are more interested in buying basic item than luxury items. Consequently, at consumer
view, hoarding of basic commodities and common medicine leads to peculiar stress to supply
chains. Typical consumers usually rush to buy essential goods and food products during
pandemic crisis. This unusual peak of demand makes supply chains fluctuate dramatically. In
future, factories can adapt and shift lines as there is changes in demand. Business will likely to
convert to digitalization and use cloud to be able to access remotely while employees can work
from home. This can also help business continuity without having significant loss.

One of the possible bright sides after COVID_19 is that having possibilities of working from
home can make renewed focus on the principal of environment- friendly tasks. The main
challenging of global trade is forming the collaborative structure of business as there were many
competitors. However, the post COVID-19 economic rebound is a global responsibility and the
realization should be a global collaborative effort. Procurement is a major role once the recovery
plan is implemented. Transparency, integrity and collaboration are essential part of post-crisis
recovery plan.

The Post COVID will have significant digital transformation as the business around the world
has been experiencing a lot of downturns. Technology will probably take place with newer
strategy in future. Using intelligent procurement process by using latest advanced machinery can
bring fruitful result too. The digitalization can help procurement leaders to accelerate the
recovery after pandemic along with proper consideration from short term to medium and long
term to reshape the organization. Contracting is critical matter in reviving and resettling small
business as well as infrastructure.

Part-B

Q.1 Discuss the importance of public procurement as a tool for economic development. (about
300 words)
The importance of public procurement
The purpose of public procurement is to grant qualified contractors, providers and provider
companies timely and cost-effective contracts and products that support national and neighboring
governments and publicly-issued businesses based on requirements and methods, To provide
engineering and service. Established within the rules of public procurement. Some of the major
purchasing issues are: First and foremost, understand the needs of consumers. We are always
looking for innovation in our organizations and organizations. Yes Marketing strategy or process
may be added for more details on the entire process.

The importance of spend analysi

For consolidation activities, the processing of the procurement process has been released.

plans. Prioritize urban work to maximize the effect of purchasing through society

And through environmental requirements, and participation of SMEs, they

Situation factor.

The importance of procurement to city economies

Historically, the process of buying goods or products is a visible task City municipalities and
other institutions, especially those Achieve wider economic, social and environmental benefits in
your neighborhood. Method Procurement has been viewed as bureaucratic, with complex laws
and isolation from other countries. It is difficult for local government personnel to interact with
SMEs Especially competitive. But this belief and lifestyle is in a time of change The town is
considered one of the main means of using it to stimulate regional financial development We
will address social and environmental issues.

Maximizing benefit through procurement 

Currently, most partner cities are conducting spending assessments, It provides a wider context
for their comprehensive action plan. Once this operation is complete, start Sincerely determine
how social requirements are integrated into the procurement process Start maximizing your
benefits through your purchase. Some methods include doing something Below: Commissioning,
bidding process, bid decision and monitoring. Buying community Partner cities are not the only
cities dedicated to promoting the importance of procurement It's an urban economy, but it needs
expansion. In fact, we believe in progressive procurement Activities must be at the forefront of
all policy activities including economic, social and environmental Factors are important.
(November 29, 2016, Matthew Jackson).
Q- 2. How “under-represented” business owner can engage with public
procurement opportunities
The public sector procurement is unlike private sector procurement. It focuses on accountability
and transparency and it emphasizes legislation, process and policy.it serves directly or indirectly
on opportunity structure to suppliers. The highly institutionalized market with high
standardization limited SMEs to enter into the market they have limited resources. Due to the
nature of the current market, objectives are less important than value of money. Currently,
single-sourcing, two-stages tendering, long-term contract and e-procurement are the best way to
save cost.  For cost reduction, consortia buying and bundling of the contract is the best way. E-
procurement is very effective to deal with a wider supplier pool by public procurers. However, e-
procurement is out of reach for small firms as it includes the awareness and ability of being
familiar with online tendering platforms. These procurement practices are the major obstacle for
SMEs’ involvement in public sector contracts. As they do not have sufficient capacity of supply
to bid for the requirement of public procurement. Due to the limited information and resources
availability, SMEs business are more successful below than in above- threshold procurement.
Thus, the participation of larger companies in tender submission is more than SME and other
under-represented businesses. This also brings significantly larger gap between small and
medium enterprises, medium and large enterprises. The larger the contract, the less opportunity
for small firms to win. Furthermore, there are other factors such as type of contract, sectors of
goods and service, type of procurers, the tender chosen and market aggregation influencing
SMEs and under-represented firms to enter public procurement. These institutionalized markets
are shaped with long-term single sourcing, strict rules and aggregate demand. These limitations
make it challenging to small firms to enter. These markets are shaped with monopoly suppliers
which can allow the smaller suppliers with the possibility of sub-contracting.

However, the strategic choice and product market knowledge of owner-manager enable them to
enter the public sector market. Sufficient knowledge of what and how the public sector buys and
outsources is a major break-in point of SMEs to win the opportunity to work with large
organizations. Thus, prior knowledge of the public sector market and how they operate, how to
deliver the requirement of clients are the key factors for SMEs and other under-represented
business firms to win the public sector contracts. 
The willingness of the owner and passion of the manager shape most of these factors. Small
firms mostly benefit from their network to enter the public sector market. Relating to the extent
of their network to external relations for accessing the market, small firms have the opportunity
to win in public as well as private sectors. The knowledge of the product of the owner is also a
strategic resource which plays a vital role in winning the chance to access the public sector
market. The perception of business owners and managers and their willingness to take risks
shape the opportunity to enter the public sector market too. Capable management, skilled staff
and buyer’s requirements are also important parts to access public sectors. This is why, having
courage to take risk, having positive attitude towards taking risks, the resources (time, money,
effort), strategic choice, having adequate knowledge of product market ,procurement knowledge
(including the ability to write effective tendering bids) and strong network connection to external
firms are essential and key points  to enter the public sector market.

Q-3 A. Estrange or engage with the public procurement opportunities

If I were a small business owner, I would take the risk of entering to public procurement
opportunity. Especially during post COVID- period, most business are relying on technology and
reducing man power. Being familiar with technology can handicap in this time of crisis. To be
able to bid the contract or tender, small business owner needs to have expert knowledge on
procurement process with strategic approach. The perception of risk taking, confidence to take
the risk is the ability of the owner. Knowing the vigorous competition, the owner must confident
enough to compete in the market. Awareness on the prior knowledge of the market and resources
such as time, money and effort are essential to enter the public procurement. During post
COVID-19 period, investors of local firms are willing to hire outsourcing in procurement sectors
to reduce the human resource of their firm. Foreign investors can’t also do procurement without
the knowledge of local procurement sectors. Besides, many emigrants are coming back to our
country due to the corona crisis. This is also an opportunity to hire outsourced people. Some
organizations hire local procurement specialists as an outsourcing expert. This can be an
opportunity for small firm owners. At this point, broadening the network of own business
regardless of the size of the firm is a key factor. If the owner of the firm is broad-minded and has
strategic network, it will be an upper-hand to win the contract. However, it is very competitive
market and has little chance to win if the other competitors have equal or almost same quality. At
any rate, staying in comfort zone can’t make the business develop. Thus, grabbing the golden
opportunity to compete whether win or not can bring experience to learn for future growth.
Having positive attitude and willingness to take the chance can bridge to win the contract to enter
public procurement.

B. The public procurement best practices and compete for profitable

work
To benchmark your procurement as best practices policy, organizations have to follow some
important factors. Proper Alignment and staffing are one of the important factors to embed the
effective supply chain management. For some business, centralized operation is more effective.
Adopting hybrid approach of centralized approach combined with decentralized approach to get
consensus can have significant improvement. Placing contract management, forecasting
planning, procurement and other related management under the leader of supply chain although
it can’t be fit with all organization, it can at least give clear structure of reporting. However, no
matter what structure was adopted, correct staffing of the supply chain is very important. The
knowledge of supply chain of staff is a vital role. Thus, most effective organization hire strong
supply chain managers who have excellent strategic thinking, strong relationship and
communication skills with management.

Using technology will make workflows and processes more efficient and effective. It also saves
time and energy of man power. It is very important of using technology in order to to keep
abreast with current digital world. The skill of manager to extract and view the data with expert
knowledge of technology is an upper hand to benchmark the organization. Procurement
automation is an effective way to save money and time as well as to reduce unnecessary
repetition of process. Such digital transformation can make your procurement more efficient.

One of the main advantages of strategic sourcing is focusing on total cost of ownership not only
on price. Currently, effective organizations give up the idea of receiving several bids and
selecting a supplier on price. Another important factor is putting contracts under the function of
supply chain to avoid the failure of communication and monitoring the contract compliance.

It is important to follow the appropriate policies and procedure in supply chains management in
order to avoid the future possible risks. Risk mitigation decision should be integrated in supply
chain organization.

Overall, Best-in-town organization can make supplier engagement smooth by collaborating

partnering with vendors. This make win-win situation with vendors and build more trust.

Vinay Sharma , April 15, 2020. COVID-19 Challenges and Response: How procurement
underpins the World Bank’s response to the pandemic https://blogs.worldbank.org/voices/covid-
19-challenges-and-response-how-procurement-underpins-world-banks-response-pandemic

https://www.researchgate.net/publication/227651958_Short-Term_E-
Procurement_Strategies_Versus_Long-Term_Contracts/citation/download
https://www.slideshare.net/DrGordonMurray/penny-wise-procurement-
strategieslongtermeffectivenessshorttermwins-10121

https://www.weforum.org/agenda/2020/05/this-is-what-global-supply-chains-will-look-like-
after-covid-19/

https://www.supplychainquarterly.com/articles/475-10-best-practices-you-should-be-doing-now