Click to edit Master title style

CHAPTER 4: Critical
Supply Chain Elements

1
4 Elements of critical supply chain
Click to edit Master title style
1. Purchasing Services
2. Supply Chain Information System and
Electronic Sourcing
3. Performance Measurement and Evaluation
4. Purchasing and Supply Strategy Trends

2 2
Click to edit Master title style

Purchasing Services

3 3
Purchasing
Click to edit Services
Master title style
Purchasing Services are an integral part of any
business organization, as it plays a critical role in the
procurement of goods and services required for the
smooth functioning of the company. The purpose of this
report is to highlight the importance of Purchasing
Services and how it can benefit the organization.

4 4
 Importance of Purchasing
Click to edit Master title style
Services:
• Purchasing Services are responsible for identifying, sourcing,
negotiating, and purchasing the goods and services required by
the organization. The purchasing team works closely with the
stakeholders to understand their requirements and ensure that
they are met within the budget and timeline. Effective
purchasing services help in reducing the cost of production,
improving the quality of products and services, and increasing
the efficiency of the organization.

5 5
Benefits of Purchasing Services:
Click to edit Master title style
1.Cost Reduction:
Purchasing Services can help in reducing the cost of production by
identifying the right suppliers, negotiating the best price, and
maintaining a good relationship with them. By reducing the cost of
production, the organization can improve its profitability.
2. Quality Improvement:
Purchasing Services can help in improving the quality of products
and services by identifying the right suppliers, conducting quality
checks, and ensuring that the suppliers comply with the required
standards. By improving the quality of products and services, the
organization can enhance its reputation and customer satisfaction.
6 6
3. Time Management:
Click to edit Master title style
Purchasing Services can help in managing the time required for
procuring goods and services by streamlining the procurement
process, reducing the lead time, and ensuring that the goods and
services are delivered on time. By managing the time effectively,
the organization can improve its productivity and efficiency.
4. Risk Management:
Purchasing Services can help in managing the risks associated
with procurement by identifying potential risks, assessing their
impact, and implementing measures to mitigate them. By
managing the risks effectively, the organization can minimize the
impact of any unforeseen events. 7 7
Click to edit Master title style
Purchasing Services are an essential function of any

“
business organization, and their importance cannot be
overstated. By effectively managing the procurement
process, Purchasing Services can help in reducing the
cost of production, improving the quality of products
and services, managing time effectively, and managing
risks associated with procurement. Therefore,
organizations must invest in building a robust
Purchasing Services team to achieve their goals and
objectives.

8 8
Click to edit Master title style

Supply Chain Information

System and Electronic
Sourcing

9 9
Supply Chain Information System and Electronic Sourcing
Click to edit Master title style
Supply chain management is a critical business function that involves
the coordination of various activities, including sourcing, procurement,
production, and logistics, to ensure the smooth flow of goods and
services from suppliers to customers. The efficient management of the
supply chain can provide a competitive advantage to a business by
reducing costs, improving quality, and increasing customer satisfaction.
In recent years, the use of information technology and electronic
sourcing has transformed the way businesses manage their supply chains.
This report discusses the benefits and challenges of supply chain
information systems and electronic sourcing.
1010
 Click to edit Master title style
Supply Chain Information System:
A supply chain information system (SCIS) is a set of tools and
technologies that enables businesses to manage their supply
chain more efficiently. SCIS includes software applications that
automate various supply chain functions, such as inventory
management, order processing, and logistics. The primary
benefits of using SCIS are improved visibility, real-time data
access, and streamlined communication.

1111
The
Clickuse of Master
to edit SCIS title
enables
style businesses to have real-time
access to data and analytics that help them make
informed decisions. The system also provides visibility
into the supply chain, allowing businesses to track goods
and monitor their progress through the supply chain.
SCIS also facilitates communication between suppliers,
manufacturers, and customers, leading to improved
collaboration and reduced errors.

1212
Electronic Sourcing:
Click to edit Master title style
Electronic sourcing is the process of using electronic
communication and technology to manage procurement
activities. It involves the use of electronic tools, such as
e-auctions, e-procurement, and e-marketplaces, to
facilitate procurement activities. The primary benefits of
electronic sourcing are increased efficiency, cost
reduction, and improved supplier relationships.

1313
 Click to edit Master title style
Electronic sourcing reduces the time and effort required
for procurement activities by automating the process. It
enables businesses to find suppliers quickly and
efficiently, negotiate prices, and manage contracts.
Electronic sourcing also provides greater transparency,
leading to reduced costs and improved supplier
relationships.

1414
 Challenges:
Click to
• While edit Master
supply title style systems and electronic sourcing
chain information
provide numerous benefits, they also pose some challenges. One of
the significant challenges is the cost of implementing these systems.
Implementing SCIS and electronic sourcing requires significant
investments in software, hardware, and training.
• Another challenge is the need for data standardization and integration.
SCIS and electronic sourcing rely on accurate and consistent data,
which can be challenging to obtain when dealing with multiple
suppliers, systems, and locations. Integration of data from different
sources is critical to ensure the system's effectiveness.

1515
Click to edit In
Master title style
conclusion, supply chain information systems

“
and electronic sourcing have transformed the way
businesses manage their supply chains. The use
of technology has improved efficiency, reduced
costs, and improved collaboration between
suppliers, manufacturers, and customers. While
these systems pose some challenges, businesses
that invest in them can achieve a competitive
advantage by improving their supply chain
management.
1616
Click to edit Master title style

Performance
Measurement and
Evaluation

1717
Performance Measurement and Evaluation
Click to edit Master title style
Performance measurement and evaluation are essential elements in
ensuring the success of any organization. Performance measurement
involves the collection of data and metrics that are used to assess the
efficiency and effectiveness of an organization's operations, while
evaluation involves the analysis of this data to determine how well the
organization is meeting its goals and objectives. In this report, we will
discuss the importance of performance measurement and evaluation,
the different types of performance measures, and the key steps involved
in the evaluation process.

1818
Importance of Performance
Click to editand
Measurement Master title style
Evaluation:
Performance measurement and evaluation are crucial for organizations
to assess their strengths and weaknesses and make necessary
adjustments to improve their overall performance. Without a proper
system of performance measurement and evaluation, organizations
cannot accurately determine how well they are performing, which can
lead to missed opportunities and lost revenue. Moreover, performance
measurement and evaluation help organizations identify areas that
require improvement, which can lead to increased productivity,
efficiency, and profitability.

1919
Types of Performance Measures:
Click to edit Master title style
There are several types of performance measures that organizations can
use to assess their performance, including:
1.Financial Measures:
These measures include metrics such as revenue, profit margins, return
on investment (ROI), and cost savings.

2.Customer Measures:
These measures focus on customer satisfaction, loyalty, and retention.

2020
3.Click
Internal Process
to edit MasterMeasures:
title style
These measures assess how well an organization's internal
processes are functioning, such as production quality and cycle
time.

4. Learning and Growth Measures:

These measures assess an organization's ability to innovate,
learn, and grow, such as employee satisfaction, training and
development, and research and development.
2121
Key Steps in the Evaluation Process:
Click to edit Master title style
The evaluation process involves several key steps that organizations must follow
to ensure a successful evaluation, including:
1.Identify Goals and Objectives:
Organizations must first identify their goals and objectives to determine
the metrics that they will use to measure their performance.
2.Collect Data:
Organizations must then collect data to measure their performance,
which can come from various sources, such as financial reports,
customer feedback, and employee surveys.

2222
3. Analyze Data:
Click to edit Master title style
Once the data is collected, organizations must analyze it to determine their
performance levels and identify areas for improvement.

4. Interpret Results:
Organizations must then interpret the results of their analysis to determine how
well they are meeting their goals and objectives.

5. Develop an Action Plan:

Based on their interpretation of the results, organizations must then develop an
action plan to make necessary improvements and achieve their goals and
objectives.
2323
Click to edit In conclusion,
Master title styleperformance measurement and
evaluation are crucial for organizations to assess

“
their performance, identify areas for improvement,
and make necessary adjustments to improve their
overall performance. By using different types of
performance measures and following key steps in the
evaluation process, organizations can accurately
determine how well they are performing and make
data-driven decisions to improve their operations.

2424
 Click to edit Master title style

Purchasing and Supply

Strategy Trends

2525
Purchasing and Supply Strategy Trends
Click to edit Master title style
Purchasing and supply chain management play a critical
role in the success of any organization. In recent years,
various trends have emerged in the field of purchasing
and supply chain management. This report aims to
explore some of the most significant trends in purchasing
and supply strategy.

2626
Click to edit Master title style

5 Purchasing and Supply

strategy trends

2727
1.Digitization and Automation:
Click to edit Master title style
One of the most significant trends in purchasing and supply chain
management is the increasing use of digitization and automation.
Companies are leveraging advanced technologies such as artificial
intelligence, machine learning, and robotic process automation to
streamline and automate their procurement processes. The adoption of
digitization and automation has resulted in increased efficiency,
reduced costs, and improved accuracy in purchasing and supply chain
management.

2828
2.Click
Sustainability:
to edit Master title style
Sustainability has become a significant consideration in
purchasing and supply chain management. Companies are
increasingly adopting sustainable procurement practices to
minimize the environmental impact of their operations. This
includes sourcing materials and products from suppliers who
follow sustainable practices, reducing waste and emissions, and
promoting responsible sourcing.

2929
3.Click
Supplier
to Relationship
edit MasterManagement:
title style
Effective supplier relationship management is critical to the
success of any organization. Companies are recognizing the
importance of building and maintaining strong relationships with
their suppliers. This involves regular communication, collaboration,
and mutual trust between the company and its suppliers. Companies
are also leveraging technology to enhance supplier relationship
management through the use of supplier portals, performance
dashboards, and supplier scorecards.

3030
4.Supply Chain
Click to edit Resilience:
Master title style
The COVID-19 pandemic has highlighted the importance of
supply chain resilience. Companies are recognizing the need to
build more resilient supply chains that can withstand
unexpected disruptions. This involves diversifying suppliers,
creating contingency plans, and leveraging technology to
monitor and mitigate risks.

3131
5.Click
DatatoAnalytics:
edit Master title style
Data analytics is playing an increasingly important role in
purchasing and supply chain management. Companies are
using data analytics to gain insights into their procurement
processes, identify areas for improvement, and make data-
driven decisions. This includes analyzing supplier
performance, identifying cost-saving opportunities, and
optimizing inventory management.

3232
Click to editIn
Master title style
conclusion, purchasing and supply strategy trends

“
are constantly evolving, and companies need to keep
up with these changes to remain competitive. The
trends discussed in this report, including digitization
and automation, sustainability, supplier relationship
management, supply chain resilience, and data
analytics, are just a few examples of the emerging
trends in purchasing and supply chain management.
Companies that adopt these trends are likely to gain a
competitive advantage and achieve greater success in
the marketplace.
3333
Click to edit Master title style

Thank you!

34