Assignment Sample on Procurement and Supply chain Management
Introduction
Modern construction industry has been undergoing several changes in the UK where clients from all over the world approach companies for undertaking construction projects. In this report, a detailed discussion will be made on the procurement system as well as the ways in which supply chain management influences a construction company.
Task 1
Procurement refers to the way in which materials and goods necessary for construction is acquired so that timely completion of projects take place smoothly. It may be mentioned that procurement management system includes several aspects which include acceptable quality of goods, raw materials and other essential items necessary for construction. On the other hand, it may be stated that mitigating several risk factors and minimizing them also comes in the ambit of procurement management systems. The construction industry is a highly complex and segmented industry where several dilemmas exist which often leads to some constraints which become a hindrance for a company (Kabirifar and Mojtahedi, 2019). On the other hand, it may be opined that reasonable pricing plays an effective part in the construction sector where competition is extremely high and it becomes the sole responsibility of the procurement management system to satisfy the clients by understanding their requirements. However, it may be stated that the procurement management team looks after the overall construction management plan so that any unwanted problem does not take place when any project is going on.
An effective procurement management plan aims at managing the overall procurement process in any construction company where several aspects related to a project such as signing contracts are looked after carefully. On the other hand, it may be added that sustainable procurement strategy is of immense importance in the global construction industry (Waris et al., 2019). On a contradictory note, it may be argued that administration and monitoring of the entire project process is minutely observed by the procurement management system. Furthermore, it may be stated that the bidding process in the field of construction plays an immensely important role where acquiring new projects becomes a challenging task which is dealt by the procurement management team of a company. Moreover, it may be added that procurement of equipment essential for construction of different projects requires a lot of capital and maintaining proper guidelines in order to carry out eco-friendly projects are also managed by the procurement management system. However, the process of sustainable procurement or the notion of green procurement is rarely practiced in the UK as well as in other countries of the world which is regarded as truly important for sustainable development.
On a contradictory note, it may be asserted that the entire process of procurement in the field of construction is a highly complex as well as a multidimensional process. Along with this, it may be implied that an effective procurement process in construction deals with an effective waste management system where extra or unnecessary materials are handled carefully in order to reduce pollution. Owing to the rising levels of pollution and concerns relating to global warming, extensive research activities are taking palace to control waste products in the construction field (Ajayi et al., 2017). On the other hand, it may be opined that managing invoice, ledgers, accounts and billing all are controlled and monitored by the procurement management team in any company. However, it may be mentioned that inventory management as well as stock available in hand is also maintained by the procurement management system where supplier portal is also monitored thoroughly on a regular basis. Apart from this, it may be argued that an effective and successful procurement management system emphasizes maintaining cordial relationships with vendors providing goods and services during a project. Furthermore, it may be mentioned that procurement has four parts namely planning, selection, administering and closing procurements.
It may be implied that planning is associated with the official procurement plan which includes a list of items that will be procured internally and goods that will be externally outsourced. In the next step, selection of vendors is done based on their advantages, disadvantages and contractual offerings. In the following step, administering takes place where a centralized monitoring system is applied and several tools and techniques are used and creation of procurement documents spreadsheets are created. Finally, in the closing phase weaknesses and shortcomings are noted along with strong points so that in future better performance is extracted. Additionally, it may be mentioned that most of the companies prefer to utilize a small number of vendors for a long term as building relationships with suppliers always provides some extra benefits in the construction sector.
Task 2
The benefits of supply chain management (SCM) in any industry are of immense importance and the construction sector is no exception to it. The benefits of SCM in the construction industry are to reduce the maintenance cost of equipment and maximizing profit with minimum investment. On the other hand, green supply chain management is becoming popular globally in order to fight with the adverse effects of increasing environmental pollution (Tumpa et al., 2019). However, supply chain management also covers several other aspects including maintaining friendly relationships with suppliers and vendors for long term projects with progresive repetitive clients. On a contradictory note, it may be asserted that finding out and deciding with whom collaboration needs to be made is one of the essential factors which SCM handles with utmost care and precision. Some of the partner members may include engineers, architects, contractors, raw material suppliers and several subcontractors. One of the most important roles that the SCM plays in any construction company is to clearly objectify the goals and targets that need to be achieved within a stipulated amount of time.
It may be stated that successful implementation of supply chain management in any construction company directly affects its overall economy. Additionally, it may be asserted that cost savings in different fields of construction depends on effectual implementation of supply chain management strategies (Lanko et al., 2018). Moreover, it may be mentioned that improvement in communication among the different departments of a company is one of the most essential benefits of SCM. Effective communication reduces misunderstandings and friction among the employees and workers of a construction company which ultimately increases the over efficiency of the workers and outcome from the company. Along with this, it may be implied that due to the presence of a powerful SCM system, any sort of delay is avoided where punctuality is maintained and shipments arrive on time. Furthermore, it may be added that significant improvement may be noticed in inventory systems where storage of finished goods is done carefully without any damage. Additionally, it may be asserted that identification of areas that may hinder the growth of a company is easily identified with the help of an effective SCM system where managers track the performance of employees and workers with ease.
On a contradictory note, it may be implied that redefining the SCM system has become immensely important where global environmental issues are addressed with much importance and urgency. It may be opined that a sustainable SCM system needs to be implemented on a wider range in order to create a competitive advantage over other companies (Nasir et al., 2017). Moreover, it may be mentioned that supply chain management is also responsible for customer satisfaction where customers do not mind paying extra money in return of premium quality service and good products on time. It may be clearly asserted that customer delight depends entirely on the roles played by the SCM of a company. On the other hand, it may be mentioned that meeting customer demand on time is an essential aspect of any business and in the case of the construction industry the same holds true. Keeping up with the constant demand from the customers is achieved by maintaining a highly efficient and skilled group of workers and employees. Supply chain managers constantly monitor the performance of the employees and providing them proper training is also their responsibility in order to improve their working capability under any circumstances.
Furthermore, it may be added that transportation of raw materials along with distribution of finished goods and products is also taken care of by the supply chain management system where everything is properly controlled with the help of technology and scientific methods. It may be implied that a highly effective SCM reduces the overall cost of production to a great extent which is regarded as beneficial for the growth of any company in the field of construction. Apart from this, it may be added that waste management and recycling of used products through SCM is often regarded as extremely helpful as it lowers the rate of pollution. Moreover, it may be opined that maintaining a loyal customer base is important in any industry and the construction industry is no exception to it where retaining loyal customers becomes a turning point in the long run.
Conclusion
From the above discussion it may be clearly stated that supply chain management is one of the pillars on which the success of a company depends. The entire SCM system has several advantages which definitely helps the growth of a company for attaining sustainable development goals.
References
Kabirifar, K. and Mojtahedi, M., 2019. The impact of Engineering, Procurement and Construction (EPC) phases on project performance: A case of large-scale residential construction project. Buildings, 9(1), p.15.
Lanko, A., Vatin, N. and Kaklauskas, A., 2018. Application of RFID combined with blockchain technology in logistics of construction materials. In Matec Web of conferences (Vol. 170, p. 03032). EDP Sciences.
Nasir, M.H.A., Genovese, A., Acquaye, A.A., Koh, S.C.L. and Yamoah, F., 2017. Comparing linear and circular supply chains: A case study from the construction industry. International Journal of Production Economics, 183, pp.443-457.
Tumpa, T.J., Ali, S.M., Rahman, M.H., Paul, S.K., Chowdhury, P. and Khan, S.A.R., 2019. Barriers to green supply chain management: An emerging economy context. Journal of Cleaner Production, 236, p.117617.
Waris, M., Panigrahi, S., Mengal, A., Soomro, M.I., Mirjat, N.H., Ullah, M., Azlan, Z.S. and Khan, A., 2019. An application of analytic hierarchy process (AHP) for sustainable procurement of construction equipment: Multicriteria-based decision framework for Malaysia. Mathematical Problems in Engineering, 2019.
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