Poignant and Important Issues in Procurement and Purchasing … Essay
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¶ … theoretical situation. The situation given is that a manager is aware of the fact that the author of this report has completed a purchasing and materials management. What specifically is asked for by this manager and the exam being completed via this report is what the important issues are as it relates to procurement. Just a short list of the high-level topics that exist are laws, contract management, ethics, information systems, performance measurement and so forth (Monckza, 2011). The author of this response and report will single out some of the more important topics and elaborate on them so as to prove that the author has a firm understanding about what really matters when it comes to purchasing and procurement. While it is indeed possible to over-complicate and otherwise over-do due diligence and best practices, doing not nearly enough can be a major drain on a business' bottom line, if not become a company-killer.
When it comes to modern purchasing and procurement, one thing that has to be a hallmark and bastion of any broad-based purchasing or procurement approach is the embracing of information systems as a way to streamline, analyze and improve overall performance. While there are indeed some people that are very good at analyzing business situations and dynamics with no computer input, there are just certain situations where a computer's ability to do the same job is unparalleled by any human mind. The catch is that the person inputting the data and configuring the system has to know what they are doing. However, the point is that so long as the baseline information and inputs are proper, the analysis that is done and output by the information system will almost certainly be superior to what any human could do with the same information. Even if that is not true, the analysis will be done much quicker and with much more overall accuracy and attention to detail. Indeed, computers do not make mistakes, as least as compared to what data they are provided. For example, if a computer is asked to add 11 and 22, the answer will always be 33 without fail unless something in the associated programming by the people who created the program messed something up (Moe & Palvaritna, 2016).
Something else that all purchasing and procurement professionals need to take seriously is ethics. While this may seem like the beginning of the usual spiel about doing the right thing and not crossing certain lines, it is instead a warning and a caution that other people in the procurement universe are less than scrupulous and/or are incompetent. As such, purchasing and procurement professionals need to be very careful about who they choose to work with, what they sign and how heavily they review documents and contracts before they are agreed to. Indeed, the contract needs to be mutually beneficial and symbiotic for all parties involved. Of course, all parties involved seek an overall benefit to the contract. If the contract too heavily favors one side or another, it may or may not be enforceable but the party that is getting the worse end of things needs to ascertain whether the imbalance is fair. In some cases, such disparity is actually called for and proper. After all, a person with shoddy credit history is probably not going to get a good interest rate on a loan because the lending party is indeed taking a risk by lending to the person. At the same time, taking that to too much of an extreme falls under what is known in legal circles as usury interest rates that are not enforceable in court if things come to that. Procurement and purchasing is no different. All parties to a contract need to ensure that they understand and agree with what is being agreed to because the chances of that contract not being enforced in court is unlikely unless there is something unseemly or extreme in the four corners of the contract. Everything should be concrete, specific and to the point as possible. Vagueness and lack of precision about things like deadlines, prices and what happens when there are problems are all things that should be avoided. In short, due diligence is not just a buzzword but is rather a way of doing business and living one's life. There are sometimes situations where making hasty decisions is sometimes required. However, such brevity in doing important things is not something that should ever become a habit… [END OF PREVIEW]
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