Procurement Strategy

As the procurement process continues to gain critical importance in public sector organizations, the need to apply specific performance measurement methods to measure and improve the procurement processes is essential for mission success. This is also concerned with verifying the degree to which implementation strategies are fulfilling the mission and objectives of the organisation while doing the procurement. Relating this to the acquisition, the evaluation criteria can include internal consistency, environmental fit, resource fit and communication and implementation. The control process involves four stages: establish performance standards, measure performance, compare actual with planned performance standards and take appropriate corrective action. These stages had significantly effect on how procurement was made in logistics and supply chain business. This is because, the supply chain concept itself has profoundly influenced traditional procurement philosophies, practices and procedures. This is true for a major retailer who has 40,000 live items, 1,500 suppliers and 1,400 retail outlets to manage. This condition is making the process of procurement become more critical as a wrong decision by the decision management unit, will result in tremendous drop in sales in business although there are many external forces impacting on organisations performance still, the procurement play a crucial role in determining the success rate.

1. Based on your critical analysis of the strategic procurement stages mention in the case, explain how procurement strategy lead to a positive impact on business performance. Where necessary, support your answer with evidence and justify your answer with appropriate citation.

2. Using the same business in the case, explain the critical success factor of a procurement strategy that should be adopted by the firm before any purchasing. Justify your answer with citation and evidence.