Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods

The Procurement of Clothes in Supermarkets:Reengineering the Procurement Models

Tutor Dai Shu Yang
School Nanchang University
Keywords Procurement Models Process Reengineering
CLC F224
Type Master's thesis
Year 2012
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Generally, if an organization is to improve its performance, one of the key areas that needs to be addressed is the Procurement of goods and services. It turns out that many organizations focus on functional departments such as Operations, Finance, Marketing&Sales, Research&Development, extra while neglecting another key department of Procurement. In any case, procurement in an organization affects almost all the functional departments. Today, Procurement is generally viewed as a strategic, proactive process, with real potential to impact profitability, corporate growth and competitive advantage.Different organizations use different Procurement Models. All these models are generated from the basic Procurement Models. Each of the basic Procurement Models has got its pros and cons. According to Timothy M. Ameredes, there are three basic Procurement Models. Therefore, there is need to ReEngineer the purchasing/procurement of goods and services. Procurement is a sensitive part in business and it affects the supply chain greatly. So if procurement of goods is well managed, some unnecessary costs can be eliminated and the firm can be in position to achieve strategic fit and get better returns.Looking at the supermarket industry, taking Metro supermarket in Nanchang as a case study, qualitative results showed that Metro used the traditional procurement model. Through observation and one-on-one interviews, Metro made a substantial investment and was not doing bad from a scalability perspective. This however posed a resource cost of ERP maintenance, process cost associated with creating POs. There was also high probability for data entry errors.Reengineering fostered dropping some of the procurement practices and embrace better practices like employing drop shipping clothes to the internal customers. This would reduce the cycle times and costs associated with them.

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