Procurement Evaluation Report For Welsh Immigrant In Australia – David Jones

Procurement strategy of David Jones

Describe about the Procurement Evaluation Report for Welsh Immigrant in Australia.

David Jones was established in 1838 by David Jones, who was a Welsh immigrant in Australia, and is the most established persistently working retail chain on the planet and yet with  its original name  given by its founder. It at present has 39 stores situated in most Australian territories and states. David Jones’ primary rival is the bigger, mid-to-up market retail chain Myer in Australia.

For most of the organization procurement process is considered as a key functionality in any organization that helps the organization (like David jones) to buy, speed up, oversee logistics, control material appropriation, repurpose, recycle, and additionally exchange or management of wastage (Kayis, Erhun & Plambeck 2013, p.42).

The following report discusses the procurement strategy of David Jones and the issues that affects the procurement process of the concerned organization. In addition to that, this report also contributes to the impact of the identified issue and recommendations that are important improve the productivity of the procurement process.

Procurement departments of every organization must go up against challenging projects or business plans keeping in mind the end goal to overthrow inadequacies in different areas of the business of David Jones (Chong, Staropoli & Yvrande-Billon 2014, p.122). Streamlining supply chain structures and procedures, interfacing from the clients’ requests through every level of the supply chain network and finding trustworthy suppliers with lowest cost in other nations are helpful in decreasing consistent losses on resources and on income from the business. There are some factors that have added value to the supply chain as well as to the procurement process.

Initially, forecasting of the demands and requesting the supplies to cover these demands of the stores are left to every individual store at different locations. As the retail industry is ever changing and volatile, therefore it is important for David Jones to use an appropriate procurement strategy in order to have competitive advantage in the Australian market.

Mangers of David Jones   have begun to view operations and purchasing capacities as more connected parts of the supply chain network, being able to contribute deliberately to the organizations growth (Kayis, Erhun & Plambeck 2013, p.51). Today the possible administrators have started giving more consideration regarding the procurement strategies of David Jones.

It is contended one of the most important objectives of the procurement process is to bolster the delivery and operations exercises with a nonstop stream of materials and services to the stores of David Jones, the acquiring and operational methodologies must be predictable with the goal that they bolster the corporate level strategies of the company (Zhang & Wei 2015, p.533).

Benefits from e-procurement at David Jones

The procurement strategies of David Jones can be seen as the example of choices identified with securing the required products and services to bolster the operational business activities that are predictable with the competitive strategies of the concerned organization (O’Mahoney, Heusinkveld & Wright 2013, p.215). Depending on the operational and competitive strategies of David Jones , the procurement strategy of the helps the organization in poetizing the business operations. 

With the rapid development in the technology David Jones also improved its procurement strategies by using the e procurement strategy. Actualizing e-procurement is considered of strategic significance, instead of strategic importance. It ought to be viewed as an incorporated part of an organizations general e-business procedure due to its huge expenditure and potential of saving investment in the operations. Many organizations spend as much as 30% of their total revenue for the indirect procurement of the products for its stores (Chong, Staropoli & Yvrande-Billon 2014, p.126).

In case of the retail business the competitive strategy is developed considering   either price leadership or differentiation. This asks retailers to pursue the price related   activities or merchandize focused activities separately.

It decreases the amount of rouge investment in SCM: By ‘rouge spending”, it implies those spending’s which are done outside of procurement contracts. According to the different managers and supervisors of the David Jones, that there are many individuals, especially when they weren’t related with a central group for the procurement, were really spending the cash outside of agreements (Zhang & Wei 2015, p.545). This issue is mitigated by implementing the e procurement process.

Better analysis of the suppliers, spending and contract prices: The use of e-procurement encouraged the accumulation and examination of spending information for the procurement of the goods and services for the stores in different areas of Australia. This can guarantee better following of procurement spending (Kayis, Erhun & Plambeck 2013, p.52). In this manner, David Jones can combine spending and influence such collected buy volume to show signs of improvement arrangement from the different suppliers. This can empower the organization to have more powerful and efficient contracts. Hence, the primary concern of the organization can be enhanced by separating many overheads out of its acquired products and enterprises through e-obtainment

Logistics optimization to reduce the cost for transportation: After actualizing e-procurement process, the organization could depend upon a system that piped everything through to its distribution center. Furthermore, Due to use of e-procurement strategy, a layer of middleman’s in the in the supply chain has been taken out. Consequently its dissemination channel could get to be more extensive. This appears to make challenges for the organization to facilitate its procurement activities. However, the aggregation of logistics can be made according to the terms and conditions of the purchase order provided by David jones (Chong, Staropoli & Yvrande-Billon 2014, p.136).  This order can be sent electronically to the suppliers. In spite of the fact that the logistic careers for the organization would remain same for delivery and transport of the products in different regions of Australia, but the organization could simply and efficiently optimize it to increase the revenue from the business.

Identified issues in the procurement process

 

Figure 1: Procurement cycle of DavidJones

(Source: O’Mahoney, Heusinkveld & Wright 2013, p.218)

Another advantage the organization has due to the use of e- procurement is to bring down the costs of products acquired by removing some of its middleman and distributors of the product. E-procurement gives open doors for the organization to go straight to the manufacturer of the product (Kayis, Erhun & Plambeck 2013, p.46). At present, David and Jones reached to a large portion of the manufacturers so that it can reduce the procurement as well as operational cost for the products. This helps the retail chain to provide products at lower value than any other competitor in the market. 

 There are mainly three issues related to the procurement process of David jones. These are standardization issues, end user resistance and difficulties in integration of the e- procurement process with other business operations and applications.

Access to the financial funds for the procurement is considered as the most predominant bottleneck in case of David Jones (Chong, Staropoli & Yvrande-Billon 2014, p.129). Burrowing further to recognize the main drivers uncovered that transparency in the budgeting,  planning and financing procedures and communication acts as the obstacle in the way of accessing the funds.

In some situations bottlenecks result from staff deficiencies, restricted access to an assigned signatory, or absence of clarity around who is approved to give approval to make an order for the organization. In different cases, marking an archive might be a low need for a bustling clergyman (O’Mahoney, Heusinkveld & Wright 2013, p.221). This kind of bottleneck can happen at different hierarchical levels and at different strides in the procurement procedure. Such circumstances can bring about deferrals all together handling and a general failure to advance a demand in the procurement process procedure. This leads to the delay in building-up the order, further postponing order processing or execution from the supplier side. In these circumstances, unless there is some intervention, the needs of the staff, division, or overseer will direct how rapidly the bottleneck is going to be addressed.

This more often than not come about because of poor coordination in the obtainment convention channel of correspondence and ought to be tended to expeditiously (Zhang & Wei 2015, p.533). Customary budgetary redesign influences the monetary status of all connections in your production network including any progressions made to the financial plan. This will guarantee that issue gets redressed.

Repetitive issues with acquirement process leads to the situations that genuinely influence the organizations performance in the market. These incorporate loss of revenue, a terrible notoriety and negative attention.

The conspicuous consequence of poor obtainment practices is loss of revenue (Kayis, Erhun & Plambeck 2013, p.50). Having poor acquirement systems implies you make repetitive buys, pay a lot for transportation, experience the ill effects of an absence of value control or create issues with contract scope.

Business organizations like David Jones, today are nearly observing their procurement divisions as they have understood their significance and the requirement for constant improvement in this divisions (Chong, Staropoli & Yvrande-Billon 2014, p.132). Thus, procurement has increased more noteworthy essentialness as a vital supporter to business objectives and a supporting function to different divisions of the organization. This helps the organization to achieve the business as well as strategic goals.

Procurement analysis also impact the procurement cycle from outside of the organization (i.e. David Jones). As an example delay in the delivery of the products due to the delay in the shipping activities that are outside of the procurement procedure, yet that are required for the procedure to be finished and the products to be conveyed at the stores (O’Mahoney, Heusinkveld & Wright 2013, p.228). Illustrations incorporate keeping money exchanges and port leeway. This kind of bottleneck can posture one of a kind difficulties in light of the fact that the bottlenecks are created by the procedures of an organization outer to the procurement department of the David Jones.

Multiple sources of supplier information:  in case if the data about the suppliers and contracts is being kept up in various departments, workplaces, or offices, therefore it asks for extra and redundant effort for collecting all the data related to the sources of the information. In the meantime, this is without a doubt making errors that regularly cause issues for the procurement cycle. 

A procurement cycle starts with the planning of the supply of products that are required at the stores and closes with the conveyance to a receiving point and the acknowledgment of the products at the warehouses. The cycle incorporates three interlinked stages: (1) planning for the supply (incorporates planning and financing), (2) purchasing activities, and (3) contract execution.    

Short term issues in the procurement process of David Jones can prompt to long term issues on the off chance that they are not addressed on time. Transient issues are things like disarray, repetitive spending and distortion of agreements and needs of the stores of David Jones (Zhang & Wei 2015, p.540).All these results into non-procurement of the products that are requested by the different stores as per their needs in Australia.

At the domestic level, changes in government and business policies can see administrative change and changes in business bolster bundles and representation (Kayis, Erhun & Plambeck 2013, p.49). These effects upon how organizations structure supply chains, how they conform to business, duty, security, morals and quality control directions, and how they grow in the market respect to its contenders.

Globally, tension between in the relations with supplier countries can enormously influence dynamics of trade by affecting the supply chain of the products required for the stores in Australia, while new relation with a nation to the free market can make new open opportunities as well as difficulties (Chong, Staropoli &Yvrande-Billon 2014, p.127). Changes in government or policies in outside nations, districts and regions make consistence, economic and provider administration challenges for David and Jones, also disturbance in supply chain network affects the performance of David Jones in the Australian market.

Other than missing a great opportunity for significant savings on the investment funds from better provider understandings, a sub-ideal Strategic Procurement handle squanders HR all through the association, from the Procurement group to Accounts Payable to working divisions. Time spent keeping up excess information, running sourcing occasions the most difficult way possible, noting provider request, and pursuing a wide range of data can indicate a great deal of FTEs (O’Mahoney, Heusinkveld & Wright 2013, p.212). The cost of this squandered asset specifically decreases profitability of the organization by decreasing the business in the market.

 The following are the activities in included in the strategic plan that can be used to improve the procurement process of DavidJones. This will help in having value for investment and continuous improvement   of the procurement cycle.  This will help DavidJones to address the issues identified in the procurement cycle of the concerned organization.   

Use of innovative procurement mechanism for getting the products: pooled procurement technique can be used to enhance speed of moderate and bulky procurement cycles, lowering down the cost for the products can be secured with these strategies. For another situation, an expedited organization together brought about an understanding that gives the advantages of pooled procurement of the products.

Use of technology in streamlining the processes of Procurement:  As the technology is changing and shaping the business process of the organization to increase the efficiency and productivity of the processes. Therefore, in case of procurement process, the use of the technology can add value for the investment done in Information technology.

The utilization of information technology in procurement procedures will change the way work is played out, the number and aptitudes of contracting faculty, and the acquirement organizations structure. Procurement process assumes a noteworthy part in retail organizations (like David Jones), which can altogether impact an organization’s prosperity. Competitive advantage is achieved by firms that combine their internal core competencies and abilities with those of their suppliers, customers and other external resources appropriately The sourcing strategy of a firm is generally characterized by choice of appropriate set of suppliers

As a center capacity it seems to be, in any case, subjected to the volatile changes in the market. Its everyday presence is particularly characterized by developing procurement volumes because of more noteworthy centralization of business on center capabilities, globalization of obtainment markets, developing business sector progression and the ever shorter product lifecycle from the manufacturers. If utilized properly, it can offer: smoother and quicker process flow, productive circulation of data, decentralization of errands and choices, expanded transparency and better control. Furthermore, data innovation helps not just to bolster inward procedures but also to have control over the procurement activities at the suppliers end. 

Developing better relation and communication with the suppliers: As the suppliers is the most important factor in the procurement of the products for David Jones. With a better communication channel with the suppliers it will be easier to track the delivery or shipment of the products at the receiving point or ware houses of David Jones. Great relationships with different suppliers will help the organization to get more favorable terms and partners who have a better understanding about the business of DavidJones.

Establishment of the proper level of control to minimize risk in procurement:  The risks and issues related to it can impact the whole process very badly that will lead to the adverse impacts on the business of DavidJones. Procedures and policies related to the procurement process of DavidJones ought to maintain a proper structure or sequence, and it is vital to audit them regularly (if not done on a regular basis) and make them up to date with the process of procurement cycle in the organization. Keeping them practical and easily understandable will guarantee consistency with the other business operations of DavidJones. It is absolutely conceivable to go too far in setting up approaches and techniques in order to manage and control the different activities of Procurement process cycle. In addition to that, the procurement department of the DavidJones should make a risk mitigation plan or a contingency plan in order to manage the demand of the products in the markets in any adverse situation.

A business organization trying to be more responsible for social needs then to reflect this objective can be done through its procurement strategies, practices and methodology. Connecting procurement and organizational goals will prompt to arrangement and shared comprehension of what constitutes success for the business organization, and for particular procurement plan.

Development of central directory for the information: As discussed about before in the other sections, this will enhance the quality and availability of supplier’s data for the procurement department of DavidJones. In any case,  it will diminish the level of extra effort required by the employees of the organization. It will likewise give better data to use in your money related frameworks, and additionally investigation and reporting frameworks.

Since most of the issues related to procurement of the products for the store can be credited to human errors (intentional or unintentional) or mistakes, these issues can be   settled decently and effortlessly.  It will ensure that the procurement framework considers these errors and depends on common comprehension. The more safeguards in place or are set up, the less of an impact these sorts of errors will have on organizations procurement process.

Conclusion

 In this report the different aspects of the procurement process of DavidJones is discussed. There are several issues that affect the productivity of the procurement cycle of the concerned organization. In addition to that, the organization should take steps for risk assessment related to the procurement process.        

Risk assessment comprises the analysis and evaluation of identified risks. Analysis involves assessment against likelihood and impact. This is where an understanding of risk is developed, and circumstances that contribute towards the risk are considered. Risk assessment also includes the identification and evaluation of the effectiveness of existing controls. Risk analysis may be qualitative, semi-quantitative, quantitative or a combination thereof, depending on the nature of the risks and the circumstances.

These circumstances will include complexity of the risk, cost, time and the availability of reliable data. Using this data DavidJones can improve the efficiency of the procurement process. This in turn helps the organization to achieve competitive advantage against the competitors in the different markets of Australia.

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