Answer 10 questions from the list of questions below (approx. 100 words each). You may use the course lecture slides, recommended course text book and other academic sources for your research if required. Non-academic (e.g. Wikipedia) references will be penalised.
- Explain the 4 processes of ‘Project Procurement Management’ (according to PMBoK 5th ed).
- Explain the 4 components of an ‘enforceable contract’.
- Explain the 3 necessary components of an ‘offer’.
- Discuss independent vs. dependent demand.
- Explain 3 practices that are essential for a JIT (just-in-time) implementation.
- Explain some hidden costs of outsourcing.
- Explain the 4 behavioural dimensions of supply chain relationship management.
- Explain the Linear Averaging method of supplier evaluation.
- What is Total Quality Management (TQM)?
- Explain the DMAIC process of Six Sigma.
- Explain 4 psychological factors that may affect bargaining.
- From a buyer’s perspective, explain some key differences between buying services and
1Societies and governments are becoming increasingly concerned about the impact of the use of IT equipment on the environment, especially in terms of energy efficiency, emissions reduction and toxic waste reduction (used phones, toners etc.).
Modern organisations are moving towards a more sustainable and ‘Green’ use of Information
Technology. Procurement function plays a vital role in organisational approach to Green and Sustainable IT.
Your task for assignment 3 is to identify at least 3 case studies / journal articles that discuss sustainable and / or Green IT purchasing (procurement) practices and address the below as a case study report:
- Summarise a few Green and Sustainable IT Procurement practices.
- Analyse how sustainable IT procurement can positively contribute to the ‘bottom line’ (i.e. RoI) of the organisation of a specific industry sector of your choice.
- Primarily focussing on equipment acquisitions and disposals, develop a high level Green / Sustainable IT Procurement Guideline / Policy for your chosen industry sector.
With the growth in High Technology Industry, there has been increase in concern regarding the environment and sustainability. The industry consumes large quantity of industrial energy and emits CO2. To overcome this concern, the industries are adopting the practice of Green Supply Chain Management which involves integrating sustainability into supply chain management. This includes the product design, material being sourced, the process of manufacturing, the delivery of the product and also the way of discarding or re-using the product after it has been used to the maximum possible life. Extension of this practice is Sustainable Supply Chain Management. It involves management of material, knowledge and capital flow along with the cooperation between the companies in the supply chain. It takes goals from all three dimensions of sustainability from the industry’s point of view i.e. Economic, Environmental and Social consideration. GSCM overlooks social concerns which are taken care of in SSCM. Both practices treat each member on the supply chain as a group of units benefiting from each other though collaborating procurement rather than an individual unit aiming at reducing the individual cost and gaining efficiency. Each member is better equipped to achieve triple objective at reasonable cost (Yan, Chien and Yang 2016).
The practice of Communication and E-procurement plays an important role in making Sustainable Supply Chain more effective. Organizations having greater use of e-procurement and communicating well with members in supply chain, have greater control over different aspect of procurement practices i.e. environment, labor engagement and safety, community, and buying on local and minority SMEs. Communication is related to environment friendly supply and procurement practices and human resource safety and health. The more the organization communicates with the suppliers the greater is the impact of sustainable procurement. Communication also impacts buying from local SMEs in a positive way. The traditional approach of “Meeting the Buyer” event may encourage and facilitate engagement with SMEs. This implies that along with e-procurement traditional way of communication also needs to be incorporated to ensure sustainable procurement. E-procurement has a positive impact on environment supply and labor health and safety. It helps procure products on the basis of e-catalogues of the suppliers and thus reduces the cost and risk involved in the person traveling from one port to another. However, e-procurement may discourage sourcing from SMEs as SMEs are usually not so well equipped with latest technological up gradations (Walker and Brammer 2012).
Other set of practices done by organization to ensure sustainable procurement is Customer IT integration and collaboration and supplier IT integration and collaboration. Customer IT integration involves the extent to which the organization can use electronic tools to manage their content and knowledge, tracking the orders and handle queries. While supplier IT integration means the extent to which an organization can use electronic tools to communicate with key suppliers regarding the content and knowledge of the products, tracking the order, having access to various catalogues, send enquiries and participate in online auctions. Customer collaboration means the extent to which an organization shares and coordinates its planning and operational decisions with the key customers. The coordination shall be done with regard to agreement on delivery frequency, sharing the inventory level so that customer can make choice accordingly, and the replenishment plans. On the other hand, supplier collaboration involves the extent to which the organization coordinated its planning and flow of goods decision with its key suppliers. This coordination shall be in regard to the delivery frequency required, the knowledge of stock levels and need for replenishment, forecasting, and sharing production plans. These four practices shall help the organization reduce costs and improve speed of the procurement (Dobrzykowski, Hong and Soon Park 2012).
Case Study 1
The primary benefit of Sustainable IT Procurement in E-commerce is the cost effectiveness. The financial benefits include reduced costs of overheads, increase in revenue, equity and shareholder’s returns. Sustainable IT procurement would help the organization reduce cost as the cost of material and resources used would reduce. This is because the substantial products are made using lesser water, energy and other resources in their production and are resource efficient. Also these products have longer life cycle which can help reduce costs relating to the waste disposal. This would further help create safer and healthier working conditions ensuring labor health and safety. It decreases the chances of frequent accidents in the manufacturing units which helps lessen the health and insurance costs incurred for the labors. It also helps lessen operational, maintenance and legal costs of the organization (Ahsan and Rahman 2017).
Sustainable IT Procurement helps management to align the procurement goals with that of the company’s. By procuring sustainable IT the management can reduce internal tensions and gets better support from the stakeholders. It helps them build better customer base, raise donations, attract more customers and contribute to the country and system at the same time. Substantial procurement also helps in reduction of business risk. With appropriate and well knitted supply chain management, organization can make sure that the goods are delivered and acquired at the appropriate time and any deviations can be well communicated to the suppliers and well as with the customers. Organization can align their value with that of supplier to ensure the alignment of the same and save themselves from bad name in future. Sustainable procurement can enable the organization and supplier to understand the market better and make most of the opportunity by open and effective communication (Ahi and Searcy 2013).
Sustainable IT procurement helps protect environment in a lot of ways. Sustainable procurement uses resource efficient products which put less demand for the limited resources of the planet such oil, gases, water, and other materials. It also helps reduce air, water and land pollutions as these products emit lesser gases and harmful radiations. Further, with the longer product life, they reduce the wastage and the leads to lesser the effect of discarding the product in the ecosystem. The resources used to produce substantial IT products are less harmful for the environment and emits lesser gases and help prevent Green House Effect. Further, transportation of products can impact air, water and land. Procuring products manufactured locally can help reduce the effect of buses, trucks, ships and airways on the environment. Reducing toxins and pollution in the environment through Sustainable IT procurement can help organization fulfill their social responsibility (Ruparathna and Hewage 2015).
Sustainable IT Procurement practice provides many benefits to the employees of the organization, the economy it works in and the fellow communities. Sustainable procurement can help advancing the sustainable economy and marketplace. Employees of the organization enjoy better health, safety and working conditions are improved. This leads to happier and more productive employees. It also promotes local economic growth by sourcing the products from local market and manufacturers. Thus creating the opportunity for local organizations and fellow communities to grow and mutually benefit from the business. It helps ensuring better wage and justified environment for the labor. The organizations practicing sustainable procurement make sure that their suppliers adhere to the labor policies set by the government. Such organizations benefits all the weaker sections of the economy by helping the local economy grow and thus save on government expenditure and overall tax load in future (Grob and Benn 2014).
Case Study 2
Energy Efficient Mark
The supplier shall make sure that the product proposed for selling shall have the mark which states that the product is energy and cost efficient. The computer monitor shall have flat panel display as they more energy efficient and use less material for production. Also notebook and laptop shall have the configuration which helps it become energy efficient and environment friendly.
The product shall have the label which states that the product is eco-friendly and using it does not pose any serious harm to the environment. The material used in the product, the design for the end of lifecycle of the product, the life and longetivity of the product, the management of product after the end of lifecycle, and corporate responsibility of the supplier are factors affecting this label.
Materials Used for Production
The supplier shall provide the detail of the products which are used for the production of final product. The supplier shall give information about their supply chain standards in order to cross check the materials used. They shall not use restricted materials in their products. Failing this shall lead to failure of purchasing contract. Also all the batteries used in the systems shall adhere to the prescribed standards.
Environment friendly design
The product shall be designed in a way that it can meet the environment friendly standards. The material used shall be marked as per the set rules. The recycled plastic content of the product shall be considered as the total plastic content of the product in case the same is included in the manufacture, there shall be easy of upgradation to enable longer lifecyle, and there shall be availability of the spare parts for atleast 5-7 years depending upon the lifecyle of the product.
The supplier shall adhere themselves from using Ozone Depleting materials such as chlorofluorocarbons and hydro-chlorofluorocarbons. It shall also not include more than 1% of metals such as mercury, lead and cadmium. The packaging material should comprise of maximum amount of recycled product which also helps in protecting environment. It shall also not have other materials such as PVC which is harmful for the environment.
The packaging material and content shall be as much recyclable and reusable as possible. The supplier shall choose the packaging which can be re-used by the customers. In order to ensure recyclability, the different materials should not be affixed with each other in a way they cannot be separated easy. The recycle code shall be mentioned on each material to ensure easy recycle of the packaging.
The equipment which has reached its end of lifecycle and cannot be reused resold further, shall be recycled responsibly. The clear instructions about the final disposal of the product till the last step shall be well defined.
Recycle- the supplier shall have a valid vendor who would recycle the product. The recycler shall be measured against the recycling standards to understand how he does it and that there is no activity involved which violates the law.
Reuse- the focus shall be on extending the life of spare parts and re-using them in order to avoid wastage and protecting environment. Product shall be made available to more people through repair and refurbishment of the product. The service provider shall have special skills required to enable reuse of the parts which includes secondary market knowledge and securing the data.
Data Security- IT equipments are not mere machines but are libraries for important data relating to an organization. The data shall be secured before the products are discarded.
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of Cleaner Production, 52, pp.329-341.
Ahsan, K. and Rahman, S., 2017. Green public procurement implementation challenges in Australian public healthcare sector. Journal of Cleaner Production, 152, pp.181-197.
Dobrzykowski, D., Hong, P. and Soon Park, J., 2012. Building procurement capability for firm performance: a service?dominant logic view. Benchmarking: An International Journal, 19(4/5), pp.567-584.
Grob, S. and Benn, S., 2014. Conceptualising the adoption of sustainable procurement: an institutional theory perspective. Australasian Journal of Environmental Management, 21(1), pp.11-21.
Ruparathna, R. and Hewage, K., 2015. Sustainable procurement in the Canadian construction industry: challenges and benefits. Canadian Journal of Civil Engineering, 42(6), pp.417-426.
Schwalbe, K., 2015. Information technology project management. 8th ed. Australia: Cengage Learning.
Walker, H. and Brammer, S., 2012. The relationship between sustainable procurement and e-procurement in the public sector. International Journal of Production Economics, 140(1), pp.256-268.
Yan, M., Chien, K. and Yang, T., 2016. Green Component Procurement Collaboration for Improving Supply Chain Management in the High Technology Industries: A Case Study from the Systems Perspective. Sustainability, 8(2), p.105.
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