Supply chain management (SCM) describes the active engagement in various supply chain activities aimed at acquiring a sustainable competitive advantage by maximizing customer value. It includes a conscious and continuous effort by all supply chain firms to create supply chains that are the most effective and efficient. On the other hand, procurement is the act of purchasing services or goods. It involves processes such as purchase planning, disposals, standards determination, inventory control, specifications development, purchasing process, supplier selection, price negotiation, and value analysis. It is an integral process in the company because it determines whether the business operations will continue. Procurement systems mainly describe software for managing organizational spending. Procurement systems are essential because they assist in follow up activities, ease administration procedures, inventory control, easier monitoring and control of organizational spending, and achieving long-term savings. Therefore, it is significant for all business to utilize the best strategies in SCM, procurement, and procurement systems. The essay will evaluate the best practices in procurement systems, SCM, and procurement.
Best Practices for SCM
Creating an efficient supply chain management strategy is important to effectively transfer goods within the supply chain. Clients always demand that their goods and services quickly and if the company’s supply chain is inefficient, they may be unable to fulfill the client’s demands. Building a proper SCM strategy can support and complement the existing business strategies, offer a clear path to achieve goals, reduce operational costs, strengthen supply chain relationships, and maximize efficiencies ( Stadtler, 2015) . Some of the best practices in SCM strategy include aligning supply chain responsibilities. When decision making power is divided among many people, the information process is slowed down. Therefore, the company should advance communication under one key executive such as the CFO to handle supply chain decisions. It can assist to reduce power division that slows down the essential decision making processes.
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The business should collaborate both externally and internally. Within the business, every person should concentrate on similar goals, and they should all be on the same page. Proper communications will ensure supply chain decisions are more accurate and quicker. The business should utilize the best technology. The right technology will maximize their efficiency while speeding up the supply chain processes. Furthermore, it encourages end-to-end supply chain visibility where the company can analyze their SCM processes while identifying inefficiencies and implementing the best changes. Moreover, the business should put value over price ( Wisner, Tan, & Leong, 2014) . For the success of the business' long-term goals, they should offer valuable service instead of focusing on cutting costs in every phase of their supply chain. The business should also value green strategies. Some clients consider the environmental impact of products before making a purchasing decision. When a business takes its social responsibility seriously, buyers and suppliers will notice the effort.
Best Practices in Procurement
Some of the best practices in procurement include integrity and getting involved early. The business should have advance work with clients for needs identification, procurement strategy development, and ensuring the integrity of all the procedures. Clients should be involved in all the processes. The business can also consult with peers especially when they are working with unfamiliar projects such as new product development ( Mangan & Lalwani, 2016) . Advice from different professionals is essential in making sound procurement decisions. Some of the specialists include risk management advisors, legal professionals, cost analysts, policy advisors, and privacy officers. The contracting officer should ensure that the customers are involved and well informed so that the process can be flexible, responsive, and creative. It also ensures that departmental requirements are met as well as their technological requirements.
The business should also communicate effectively by ensuring each bid is accompanied by written instructions. Also, they should select the best contracting technique and commodity knowledge. The contracting technique should comply with industry standards. The contracting officer should have adequate knowledge about market conditions and the commodity industry such as the pertinent factors that affect decision making. The business may use lie cycle management of assets (LCMA) as an integrated approach in material management that focuses on the procurement process as a whole rather than separate activities. Furthermore, the contracting officers keep updated records for audit purposes, good management, and adequate access to information ( Christopher, 2016) . All the documents should be updated for any person who may require consultation or assume responsibility in the future processes. For all solicitation processes, the contracting officers should use the standard procurement documents accepted by the company and industry. The standard documents are significant to ensure al procurement decision comply with company and industry regulations.
Best Practices in Procurement Systems
Some of the best practices are familiar, simple, or straightforward. The business can establish a supply chain council whose purpose is giving directions and helping to align the supply chain or procurement strategy with the overall business strategy. The council should include influential company leaders, corporate executives, or business unit managers ( Mangan & Lalwani, 2016) . The council members should have regularly scheduled meetings. The council should also address barriers to success within the organization and ensure that the company performs to its potential. It also gives a chance to business unit leaders to offer supply chain management leadership and proper information about future products and strategies.
The company should align factors of production in a way that maximizes efficiency and gives benefits to the company. The company can embed management professionals in all business units while other businesses prefer a centralized approach. However, a hybrid approach is the most effective because it has a centralized strategy to boost consensus and a decentralized approach when executing functions to improve service delivery ( Stadtler, 2015) . Also, correctly staffing the organization is significant to success. The members should be properly recruited and trained to perform their functions.
The business should select software that will structure their workflows and assist them to be more efficient. They should evaluate the function that requires improvement and selects the best innovations and technology that addresses the process needs. The company can also establish and build proper alliances with key suppliers. It requires a two-way relationship where both the seller and buyer jointly manage their relationship ( Wisner, Tan, & Leong, 2014) . It should also involve processes to ensure the supplier-buyer relationship remains vibrant and healthy while creating platforms for resolving problems. It should boost their business practices so that no party received a below standard deal.
Conclusion
The essay has evaluated the best practices in procurement systems, SCM, and procurement. Some of the best practices in SCM include aligning supplying chain responsibilities, valuing green strategies, collaborating internal and external processes, utilizing the best technology, and proper communications. The best practices in procurement include using specialist, ensuring integrity, consulting with peers, communicating effectively, maintaining records, using standard documents, and selecting the best contracting methods. The best practices in procurement systems include establishing a supply chain committee, aligning resources with business strategy, establishing proper alliances with suppliers, and using the best procurement software. Business managers should assess their procurement systems and evaluate their spending tendencies. The best practices analyzed above do not represent all the actions that are taken by the best supply chain managers ( Christopher, 2016) . However, they are essential to every business and can transform the productivity of every company. Ultimately, the best practices should facilitate purchasing decisions to benefit the company.
References
Christopher, M. (2016). Logistics & supply chain management . Pearson UK.
Mangan, J., & Lalwani, C. (2016). Global logistics and supply chain management . John Wiley & Sons.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach . Cengage Learning.
