Unqualified and inexperienced personnel pose a significant challenge to an organization’s Purchasing and Supply department. This is because they manage the whole process, right from placing an order to the delivery of the required inventory. Incompetence amongst the personnel could cause poor business performance posing a significant financial risk to the company. In this paper, I will discuss personnel as one major challenge that faces leaders in the field of purchasing and supply chain management. The paper also presents recommendations of how leaders can address this challenge to ensure the success of their organizations.
Cost efficiency in the management of purchasing and supply is crucial for the short and long term survival of any organization that has this department. Incompetent, fraudulent or minimally experienced personnel might exaggerate the cost of purchases making the company incur a lot of expenses. The productivity of a company will only be gained by the effectiveness and reorganization of its purchasing department (Hallikas & Lintukangas, 2016). Lack of restructuring will make the company incur high costs in the procurement of inventories leading to losses or small profits.
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Poor working relationships amongst the workers is a challenge that leads to poor coordination of activities. The running of activities in the purchasing department cannot be effective in the absence of teamwork. This leads to situations such as delays the ordering of supplies, lack of review and minimized monitoring of the inventory to ascertain proper forecasting in the future. Suppliers and customers who have the potential of working in teams should be the most targeted when building relations (Araujo et al. 2016). The inability to create relationships is a challenge to the department since it leads to the loss of potential customers and suppliers.
Lack of proper alignment between corporates and their purchasing department hinders proper engagement between the buyer and the supplier. Poor internal communication and integration between an organization and the suppliers lead to failure in the mobilization of the providers’ resources. Inadequate knowledge about a company’s suppliers makes it difficult for the manager to solve problems and develop good working relations with them (Araujo et al. 2016). The organization is forced to work under the dictated terms of the supplier since the manager did not ascertain their potential at the onset of the business engagements.
The company is at risk when its primary objectives are not merged with the objectives of the purchasing and supply department. The manager should be able to set and prioritize goals in line with these objectives (Derwik et al. 2016). When there is a lack of proper alignment between the two, there is a risk of the purchasing and supply department undertaking activities which do not contribute to the achievement of the organization’s objectives. This is a challenge because the internal organization should be in constant review of the operations of the purchasing department. Managers should, therefore, create good relations between various departments in the organization.
A demoralized Personnel will rarely deliver in their obligations as nothing drives them to achieve perfection. They might not even see the need of reviewing an order, and such a situation places the company at risk of receiving orders that have not met the required specifications. An order is placed in line with the stated specifications of the organization so as to meet and fit the products produced (Araujo et al. 2016). This is a major challenge as it imposes unnecessary expenses on the company in unwanted purchases. Poor negotiations skills may lead to the acquirement of low-quality products at extremely high prices (Derwik et al. 2016). In the event of a negotiation, the personnel should be keen on the quality of the product, its specifications and its price. The specifications of the purchases should fit the products. All the purchases that are made for an organization should be within the organization’s budget.
Lack of creativity and innovation amongst personnel is also a significant challenge to any company. Personnel should strive to be creative, innovative and inventive (Derwik et al. 2016). The process of selecting reliable and affordable suppliers requires a significant level of creativity. Lack of innovative personnel in the supply department means that finding practical solutions to problems and devising of efficacious ways of doing things becomes difficult. The strategies and objectives of a company cannot be achieved unless creativity is applied.
There are several recommendations on how to address these personnel - related challenges. The leaders of purchasing and supply divisions should come up with ways to monitor and evaluate the operations of their personnel (Hallikas & Lintukangas, 2016). This helps in ascertaining the decision-making capabilities of their staff. Monitoring and evaluation are essential when determining the capacity of staff to prioritize between issues and strategize effectively.
Before hiring personnel for the purchasing departments, management should pay close attention to the working experiences of the prospective employees (Derwik at al. 2016). More experience comes with more skills and enhanced knowledge. Experienced personnel will be creative and innovative in the execution of their day-to-day duties. They are also able to tackle technical and other issues within the department as they emerge. Their experience will assist them in negotiating and acquiring of high-quality goods for the company at reasonable prices.
When recruiting purchasing and supply department personnel, it is important for an organization’s management to consider their combined set of skills and competencies (Hallikas & Lintukangas, 2016). Employees with several skill sets and competencies tend to be highly adept at their jobs as compared to those with do not possess such skills. The purchasing and supply department is usually a very busy place. This requires people who can multi-task and concurrently coordinate different activities to perfection.
References
Araujo, L., Gadde, L. E., & Dubois, A. (2016). Purchasing and supply management and the role of supplier interfaces. IMP Journal , 10(1), 2-24.
Derwik, P., Hellström, D., & Karlsson, S. (2016). Manager competences in logistics and supply chain practice. Journal of Business Research , 69(11), 4820-4825.
Hallikas, J., & Lintukangas, K. (2016). Purchasing and supply: An investigation of risk management performance. International Journal of Production Economics , 171, 487-494.
