The main purpose of this report is to analyze the effectiveness of purchasing management aspects in purchasing management operations in the company or business organization. These aspects include supplier selection criteria and issues relating to it, ICT aspect for purchasing operations and purchasing cost analysis in an organization. There are various types of these aspects in the business market operations but not all effectively lead to success, as a result the report objective is to recommend the best criteria that can be used in the organization to enhance success. The company to be used in this case is Coca-Cola Corporation which is a global company (Mukhopadhyay, et al, 2016).
Coca-Cola is a beverage corporation that is globally represented with more than 500 types of beverage drinks that are non-alcoholic. The company was invented in the year 1886 in Atlanta Georgia by John Pemberton. It has various sectors that function to enhancing its success in the world of purchasing, production, marketing, and distribution. Among the various drinks offered by the company to its customers are coffee, soft drinks, energy drinks, water, juices among many others. The main objective of Coca-Cola Company is to be the best serving outlet to provide best beverage products and services to its customers (Giannoumis, 2015).
Managing directors in over 200 countries worldwide have the roles to ensuring smooth management activities in line with the company’s strategies and objectives in the beverage market. Purchasing managers in all the companies’ outlets are well trained to ensure a smooth and fair supplier selection criteria, with distinct ICT purchasing method that ensures all purchasing goals are met. To enhance purchasing of the company’s product, the company has set a strong digital platform where all their customers are able to give their views about the company’s product. The target market is all age groups the company is doing well inline of marketing and distribution (Weele, 2010).
This is a process by which logistic supplier selection management is enhanced or carried out in the company. Being a global company, Coca-Cola has set supplier guiding principles that any individual looking for a contract to supply raw material relevant to its production activities, should strictly adhere to the set principles. These principles give a simple outline of the company’s values and what they expect from their suppliers. The set values are lined with human rights policies important in ensuring that all involved are respected as they also respect the company. Since the company SGP (Supplier Guiding Principles) were established, collaboration with the supplier partners has enhanced success in workplace rights assessments. The main goal for the companies SGP is to ensure that all the suppliers’ requirements are maid according to law and the set strategies and objectives. Suppliers should supply only what they are expected to by the company and also in the right required position (Dejian, 2015).
Social responsibility criteria are what the company uses to select its suppliers. Being a global company with various local outlets in the world, the need to acquire adequate raw material is on a higher level. This is important in ensuring that the set supply and production goals are met. Both local and international suppliers offer their services to the company (Sekaran & Bougie, 2016). It’s formed on the basis of fairness and acquisition of human rights both at workplaces and outside. An assessment of the appealing suppliers is done by the supplier selection manager and his or her team following the SGP as required. Only those that meet the requirements are lucky to offer their supplying services to the company. If any of the chosen suppliers fail to implement the set principles, the supplier authority is expected to take corrective measures or actions. In the same way that the company signs a contract with the supplier, it has a right to terminate the contract if the supplier cannot uphold the supplier guide principles.
Coca-Cola is a corporation that is formed on the provision of services to its customers. With more than one billion customers in the whole world, the products and services required are extremely many. To ensure this products and services are always present for their customers, the company should adopt delivery supplier selection criteria. This is a method where only those that have been identified to deliver are chosen to sign the supplying contract with the company. This is important to ensure that any required amount of supply into the company is readily available at all times. The company’s supplying selection management should ensure that the rate and procedures at which they choose their suppliers is the same as the rate of production and services delivered to their customers. This is important to help ensure there are a steady supply and distribution of the company’s product without wastage. It also enhances customer’s loyalty to the company’s services as they are aware they can always get their services as they need it and at any time.
This refers to information and communication technology means used by Coca-Cola Company in its purchasing operations. Just like other existing multi-national companies, the company has an aim to maximize its profits and also maintain a high level of sustainable growth which is long lasting within the growing beverage industry. The company’s ICT for its purchasing operations is database technology. This is an ICT purchasing operations technology that provides time and accurate to purchasing operations of the company’s products involvement important in enhancing strategic planning and other influencing tactical purchasing activities. Database technology ensures that the activities involved can be controlled both externally and internally with the internal purchasing side having the command (Shook Mei & Siohong, 2017).
The main purchasing goal for Coca-Cola Company is to have adequate products to supply to their customers. Purchasing operations of the company ensure that a steady supply and production of beverage products is maintained to help provide services to their customers. The company has a relevant need to remain relevant in the market. Being a beverage corporation with more than one billion customers in the whole world, the company has to ensure its set objectives and goals are ensured at all times. Competition in the market enhances the development of the competing parties with an aim of helping them to remain relevant in the marketing structure. With a set mission to refreshing the world, a goal to inspire moment and a vision to create value in the world and make a difference, the company is obliged to remain relevant in the market. The purchasing operations management team has a role to ensuring that the goods supplied into the company are relevant. They should support the set mission, vision and goals to enhance the relevance of the company in the beverage marketing structure. ICT purchasing method in this case database should as well be used relevantly to ensure that purchasing activities are in line with the organizational set purchasing objectives and strategies (Kant, et al, 2010).
As a global corporation, the company should use e-commerce software system in its operations activities. This is because the software is a buy-side software and can be used by all company outlets important in helping the company maintain its operations pace. That is, using this operations software in purchasing activities, the various departments and outlets can be able to learn what’s right or wrong they are doing the same with other corporation counterparts. It helps in ensuring that all operations activities are recorded and maintained or stored for future reference. The level at which Coca-Cola company, ensures purchasing operations power in all its activities, enhances the level of which it remains relevant in the market. Supply can go wrong but with the right purchasing method in place, it’s likely to identify the mistake and correct it relevantly. Purchasing operations sector is very crucial in an organizations market operations.
Purchasing is a crucial part of every business unit in the market with an aim of offering services to make a profit. Fundamentals of cost analysis in every business unit are very crucial as it allows assessment of all costs involved to help come up with a final price of the service offered or the product sold. Purchasing cost analysis is the analysis of all the costs that have taken place while acquiring that product to enable identify the last price of the service or product to be taken out in the market (Regassa & Corradino, 2011). The actual cost is the first aspect of the analysis in addition to other direct and indirect costs that are important in acquiring the product. Main purchasing related goal of Coca-Cola Company is to remain cost effective while purchasing goods from the market. The need to give products to the market using the best cost is to remain significant and cost-effective while selling goods and services to their customers. In cases where the company has an overstock of its products, the holding value or cost has to be evaluated with the total cost of that product.
Sales of the same item to other purchasers is a method of purchase cost analysis that Coca-Cola Corporation Company uses to determine the price of the end product taken out in the market. This is a method that enhances the catalog used by the seller to buy a particular product to influence its price to different people but at different times (Camarero Izquierdo, et al, 2015). The price installed on that particular product can be verified with other customers who had bought the same product earlier. This is usually noted to enhance ant notification of a change in price. This method is not reliable to selling good and products that are fast in the market. The corporation tends to use this mode of cost analysis with an aim of maintaining its customers. There must be an earlier price to compare so that they can identify any change that may occur while purchasing the products in the market. The cost-benefit tool is the most advocated for in purchasing market (Rice, 2015).
These are the direct and indirect costs involved while producing the beverage products till it reaches consumer market. They involve:
These steps of various cost analysis during production and distribution of the beverage products gives the last price of the product in the market.
The company should use market price method of purchasing cost analysis. Competition levels between the established and the establishing beverage companies are high. Example, Coca-Cola Company has been experiencing increasing levels of competition from the Pepsi Company. This is noticed with the average of the earlier input from the company sales and the current seasons. Market price method ensures that the price at which the purchasing price is arrived at is enhanced by the price in the market of that particular product. Competition is as a result of increased products in the market with varying prices and different qualities. Many beverage companies have high-quality products and the defining quantity on whether the input is high is the price. Most of the customers in the market are not concerned with the quality but with the price of the commodity or rather the product. Market price method ensures that the price of other competing rivals does not vary to disadvantage the company.
Conclusion
Supplier selection criteria in every business are very important as it influences the basic supplies getting in the organization for production. To enhance this, the supply management team are coactively applying supplying principle guidelines effective for acquitting the best supplier for the company like in the case of Coca-Cola Corporation. Information Technology is very crucial for any organizational purchasing operations that are aimed at benefiting the business. This is because it enhances the purchasing manager to understand all the followed procedure and also keep count of the products getting in and out of the company as we as their value. Purchasing cost analysis is very important to help understand the price in which the product will be given in the market.
The purchasing cost analysis involved in this case should enhance health and positive competition in the market. Price of similar goods should not vary with high ranges as price tags influences market more than quality. Purchasing operations in any business organization should be positively enhanced to enable control of all activities relating to price, product, and people in the market activities to enhancing product market development.
References
Camarero Izquierdo, C., Garrido Samaniego, M. J., & San José Cabezudo, R. (2015). How Strategic Purchasing Orientation and Transformational Leadership Impact Performance: The Mediating Role of Information and Communication Technologies. Journal Of Business-To-Business Marketing, 22(4), 269-292. doi:10.1080/1051712X.2015.1115701
Dejian, Y. (2015). Triangular Atanassov’s intuitionistic fuzzy Bonferroni mean and application to supplier selection. Journal Of Intelligent & Fuzzy Systems, 28(6), 2785-2791. doi:10.3233/IFS-151557
Giannoumis, G. A. (2015). Transnational convergence of public procurement policy: a ‘bottom-up’ analysis of policy networks and the international harmonisation of accessibility standards for information and communication technology. International Review Of Law, Computers & Technology, 29(2/3), 183-206. doi:10.1080/13600869.2015.1055662
Kant, G., Jacks, M. and Aantjes, C., 2010. Coca-Cola enterprises optimizes vehicle routes for efficient product delivery. Interfaces, 38(1), pp.40-50.
Mukhopadhyay, D., Verma, R., & Mahajan, T. (2016). A Study of Revolution Marked by Ict in Purchasing Behavior of Consumers for Non-Life Insurance Products in Delhi Ncr. Journal Of The Insurance Institute Of India, 4(1), 75-81.
Regassa, H., & Corradino, L. (2011). Determining the value of the coca cola company — a case analysis. Journal Of The International Academy For Case Studies, 17(8), 79-86.
Rice, D. (2015). Public procurement as a means to achieving social gains – progress and challenges in European legislation and standards for accessible information and communication technology. International Review Of Law, Computers & Technology, 29(2/3), 162-182. doi:10.1080/13600869.2015.1055661
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.
Shook Mei, C., & Siohong, T. (2017). Determinant factors of industrial purchasing personnel’s adoption of internet for business purchasing related activities. Logforum, 13(3), 285-299. doi:10.17270/J.LOG.2017.3
Weele, A. J. (2010). Purchasing & supply chain management: Analysis, strategy, planning and practice. Andover: Cengage Learning.
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