Procurement Management Of Small Organizations

Introduction

This is the first assignment of the course procurement management. In this assignment our group is going to collect information about 3 small companies in Shanghai and analyze compare their management situations problems in purchasing and current risks.

Comparative Profiles of the Organizations

пЃ¬ Brief description of business and supply chain position identification:

A: JinShanCheng restaurant in Songjiang university town along Wenhui road. It is a restaurant mainly serving the authentic Sichuan food and providing fast lunch. This restaurant has about 100seats with 8 big round tables and 12 small tables. It can serve about 100 people to have dinner at the same time. 7 cooks and 6 waitresses are employed there. Their target customer are SIFT students and students in Donghua University. It only has one supplier for fresh vegetables and one for raw meat, 2 suppliers for kinds of fish and one supplier for special condiments in Sichuan province.

B: Tianli book store: It is a small bookstore selling over 600 kinds of books on various aspects for different knowledge branch ranging from Science and Engineering to business management and economics. Many reference books for various certificate examination and popular fiction can be also found there. It provides the students with strong support for learning activities including the services of printing and duplicating. There are 60 square meters with 3 book shelves and one duplicating machine and 2 printers. It mainly serve the students in SIFT and Donghua university.

C: Zhao xiang vehicle fitting cooperation. It is a second tier wholesaler of various kinds of filling parts including spark plug, second tier wholesaler of pump and shock absorber, and the distributor of engine piston. It is a small organization with registered capital of 500thounsand RMB.

Organization Products Position in SC Supplier Target market/customer

JinShanCheng Restaurant Fresh vegetables Manufacturer Yixiang vegetable wholesaler Students in Songjiang university town, especially SIFT student

Raw meat Manufacturer

Tablecloth washing Customer Laundry in university town

TianLi

Bookstore Economics& finance Retailer Wholesaler

in Minhang

Students in Songjiang university town, especially SIFT student

Business management

Science& engineering Wholesaler in Songjiang

Popular novels One supplier in Hangzhou

ZhaoXiang

Automobile fitting

Cooperation Shock absorber First tier wholesaler Ruian Yaxing automobile fitting factory Automobile repair factory or

Automobile assembly plant

Engine piston Second tier wholesaler Beijing Puran wholesale agency for Federal mogul

Spark plug Manufacturer /

TianLi book store is a typical retailer in supply chain. It has 4 suppliers, 2 of them are located in Shanghai Minhang district. They are the major supplier for books in economics, finance and business management. And this book store purchase popular novels and books from a book wholesaler in Hangzhou.

Similar to TianLi bookstore, the restaurant also plays a retailer role in its supply chain for its beverage and alcohol. But for the dishes, the restaurant can be also considered as a manufacturer. They purchase fresh vegetables, meat and special condiments to prepare for authentic Sichuan food. It also sources some activity such as washing tablecloth to a laundry nearby.

The automobile fittings cooperation plays various roles in supply chain for different products. For shock absorber, it is the first tier wholesaler in its supply chain. They mainly purchase shock absorber from Ruian Yaxing Company who is a big manufacturer for automobile fittings. And several other manufacturers have also developed business with them. They’ve developed long-term relationships with their suppliers.

Engine pistons are mainly purchased from Beijing Puran Trade Company, which is the wholesale agency for federal mogul’s engine pistons. And ZhaoXiang also has a small plant producing spark plugs for the automobile repair factories in Shanghai.

пЃ¬ The phases of purchase process:

1. Identify user need for products or services.

A: The purchasing process begins with identifying or anticipating a materials or services needed by a user.

JinShanCheng restaurant purchases raw materials such as meats and fresh vegetables. The internal users of the restaurant are these cooks, and they transmit their needs by word-of-mouth to the employer.

Sometimes, a service is required and purchased. The waitress may want to have these tablecloth cleaned. They will communicate with their employer about how many sets of porcelain dinner sevices and pieces of tablecloth needed to be cleaned. All these should be approved by their employer.

Organizations Users Method used to identify needs The way to communicate

Restaurant Cooks and waitress Direct stock checks By word-of-mouth

Bookstore Students Market demand forecast for newly published books Computer-generated method

Automated notification of depletion

ZhaoXiang

Automobile fitting

Cooperation Sales person Reorder point system for repetitive goods

Computer-generated method

B: The bookstore will identify the need for books by monitoring their reserves. An information system is applied in bookstore to identify which book should be purchased. When the quantity of a certain type of book is depleted to a certain level, the system will notify them and they will determine whether to issue a request for replenishment. Beside these routine items, they also have to know which book newly published tend to be popular in