Function of procurement is concerned with sourcing activities, negotiations and having a strategic selection of the goods and services that is important for the organization. It is the also the process of managing the purchase of goods with taking effective buying decisions (Kakwezi and Nyeko, 2019). The current report is based on the case study analysis of Agricultural and Construction incorporation (ACI) that manufactures and supply agricultural vehicles. The business maintains relationship with the supplier to manage its procurement function for buying components of parts and services. Generally the business applies Just in time approach to managing its activities relating to procurement. ACI generally has effective wiring loom management function and also manages functions that are related to logistics.
Analysis of the case study
Identify and categorise five key risks for the procurement function at ACI
Limited knowledge of supplier: ACI generally has effective practices of distributing and manufacturing of agricultural vehicles. One of the functions of ACI is associated with wiring loom category management. Special design department of ACI is responsible for designing the wiring loom that is unique for each vehicle. The category manager of such function is well informed about the function and having effective relationships with the suppliers. But the manager has limited knowledge of the suppliers (Mena et.al. 2014). This is the risk for procurement function as it might impact on distribution process and impact on lowering down the productivity of the supply chain network.
Identify reasons why ACI might consider outsourcing its disaster recovery services.
Outsourcing activities are being considered by offering task to other experts that can handle the task in an effective manner. There are some of the activities that are uncontrollable for the business and the business require the support of other expertise that can bring effective solutions. For example, the business generally outsources the raw material that is being used in the manufacturing of the vehicles. In addition, there are activities that are being utilized for disaster recovery (Rabbani et.al. 2016). Planning for disaster is generally difficult for the organization as it needs effective measure and contingency plans.
Thus, cost is one of the most driving factors that require business to take effective decisions. Disaster management, recovery is one of the important factors that require effective business planning. There are governmental authorities and other non profit making organizations that prepare plans for planning activities related to disaster recovery. The necessary precautions are required to be taken to minimize the impact of disasters, particularly in relation to critical functions of the business (König and Spinler, 2016).
To maintain organizational success, choice of managing in house backup and disaster recovery strategy is to be created for handling any damage. Besides, it is necessary for business to have fixed insurance plans regarding the damage of goods and also to the third party owners. It is required by ACI to perform business impact analysis that identifies the solutions that can cause damage to organizational processes, systems and functions (Mackenzie and DeCusatis, 2013). The process for disaster recovery can be effectively linked to entire strategy of the corporations that require necessary corporate backing. Outsourcing can be done because recovery plans can be more advanced and can be planned in the best manner.
Thus, disaster recovery can solve the problem of losing the candidate that might impact on the reputation of the business. It can be also outsourced from large companies because they have necessary date controls and resources that can relax and focus on running of the business. Thus, recovering from the experts saves the agency fees and saves time that can spend on working for the growth of the business (Mackenzie and DeCusatis, 2013).
From the report, it can be summarized that ACI needs to bring flexibility in their supply chain. There are diverse suppliers of the ACI that can be shortened and large supplier can be chosen that can supply 3-4 components at the same time. In addition, it is necessary for ACI to use adequate information technology that can simplify the process of supply chain and add flexibility in the management of logistics. It can also be recommended for ACI also to consider outsourcing actions for management of the disaster that can heavily impact on the performance and losses of the organisation.
Books and Journals
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