Effective Supplier Selection Criteria For Purchasing Management Department

Overview of Apple Inc.

Question:

Discuss about the Purchasing Management Of Apple Inc.

As a manager in the purchasing management department, one of my roles is to ensure that all the inventories, goods and supplies that are needed in the process of operating business are ordered as required and maintained in stock. A purchasing manager is bestowed with the responsibility of taking control of the costs of all the goods that order, control over the levels of inventory and also ensuring a good relationship with the suppliers (Davies, 2013). This paper intends to analyze the effectiveness of the supplier selection criteria and the related issues, the purchasing costs and also ICT for purchasing operations and management.

Apple Inc. refers to a multinational technology Company that is situated in America with its headquarters in Cupertino, California. This company is involved in the designing, development and the sale of computer software, consumer electronics, and other online services. Some of the hardware products that are offered by the company include; Mac personal computer, iPhone smartphone, iPad, iPod, Apple watch, Apple TV digital player and smart speaker referred to as HomePod. Some of the consumer software products that the company offers include; iTunes media player, Safari web browser, macOS and iOS and iLife and iWork which are creativity and productivity suites (Grady, 2009). The main competitors of Apple Company are Samsung, Google, and Microsoft. To reach its market, the company has a wide range of suppliers who employ millions of people to ensure ease in accessibility of their products globally. The main organizational goals of Apple Inc. are leveraging its ability to design and develop, take responsibility in environmental protection, enhancement and expansion and lastly offering support to the community. To achieve these goals, one of the strategies that the company has undertaken is being involved in community activities and the creation of employment. The other strategy is encouraging innovation and eliminating any of the toxic products in their production process. The third strategy that the company has adopted is offering superior innovation as well as integration so that it can be in a position to design and also develop new and unique products.

The three purchasing goals and needs of the Apple Company include; cost leadership, growth and the creation of a sustainable advantage. For the cost leadership to be achieved in the organization, the procurement process must be rigorous across the value chain. The creation of growth as the second goal of the company can be achieved by the strategy of marketing embraced so that it can be easy to drive products differentiation, ensure a faster and a better innovation in products and also market entry. There is thus a need for the company to work hand in hand with the suppliers through collaboration so that they can offer ideas for the creation of new and improved products as well as services. The other need of the company is to have a clear understanding of the procurement portfolios so that the company can be in a position attain a sustainable advantage. The company needs to design unique strategies so that it can be in a position to compete effectively in the market due to its competitive advantages (Kahraman, & O?ztays?i, 2014).

Purchasing Goals and Needs of Apple Inc.

To choose the right supplier requires more than scanning the price lists. The choice of the best supplier depends on factors such as reliability, money, service, and quality. A strategic approach should thus be adopted while choosing the suppliers. The first step in the criteria that I would recommend for selecting suppliers is thinking strategically in the process of selecting the suppliers denotes that the best suppliers are those who provide products that meet or even exceeds the need of the organization. Thus, Apple should make sure that the supplier selected meets the organizational needs.

The next step that I would recommend is the determination of what an organization is looking for in a supplier. Apple should ensure that it chooses suppliers who are reliable, delivers consistently quality products, have clear communication and a strong service, have financial security, those who are ready for a partnership approach and also the company should take into account the value for money (Kotzab, Pannek, & Thoben, 2015). The third step is the identification of the potential suppliers. This can be achieved through the use of some sources such as recommendations, trade associations, exhibitions, directories, trade press and business advisors. The fourth step in the selection of the suppliers is shortlisting the suppliers. This is done after getting a clear picture of the kind of a supplier that an organization wants to have. In this, the procurement manager should consider factors such as whether the suppliers can deliver, the financial security of the supplier, the time they have been in operation or whether they are in any other approved list of suppliers.

The other step in the criteria for selecting the suppliers is choosing a supplier. After shortlisting the potential suppliers, the organization should consider approaching them and asking them for a written quotation and a sample. This is very imperative in that it assists the organization to get a clear picture of that which it needs, how often they will need it n and the level of the business that they need to place it (Monczka, Handfield, Giunipero, & Giunipero, 2015). They should thus get the quotation and do a comparison of the quotation for all the potential suppliers regarding the factors that matter most to the organization. Even though the price is an important factor, it should not be the only one to consider since lower prices may not be cost effective in the future if they reflect poor quality. The last step is getting the right supplier, and in this, the business should know its needs, carry out research, check around and also credit check the suppliers so that it can choose the best and agree on all the levels of service before starting.          

Effective Supplier Selection Criteria

Due to the technological advancements, there has been a widespread use of the Information Communication Technology in businesses. Apple as a company aims at streamlining its purchasing operations so that it can save on time and resources and also improve its effectiveness in the delivery of services and products to their customers (Shah, Gorty, & Phirke, 2011). It’s at times difficult to keep up with the changes in the market due to the trending social network sites and also other programs that have an open source in the market. ICT can be used to greatly aid in the streamlining of the process of purchasing, increase the information available to the company and also gain access to the data required.

One of how ICT can be applied to improve the purchasing operations is through the use of the emails for communication. In this, the Apple Company can make use of the email to communicate with the suppliers. This can greatly assist in the improvement of the purchasing operations since the company can be in a position to easily get in touch with the suppliers and communicate with them in case they have an urgent issue that needs to be addressed. Through the ICT, the business can have an opportunity to either express its gratitude or disappointment following the products delivered by the suppliers. This thus aids in improving the purchasing operations since the business partners can communicate effectively. Emails are considered to be ideal for the communication in that it is possible to send attachments such as pictures and files. In case of communication of any purchases related information, email can thus be used in the transmission and receiving of the digital information (Moser, 2006). 

The second recommendation on the ICT that should be applied to improve the purchasing operations is video conferencing. This is very imperative in improving the purchasing operations in that it allows the two parties involved communicating on their computers and they can easily discuss the matters regarding the purchasing of products. Through video conferencing, the individuals involved can have a face to face meeting irrespective of their different location, and this is considered to be a very effective tool especially in the case where the one party want to demonstrate something about the products being purchased (Ariwa, & Qawasmeh, 2011).

The third recommendation on the ICT that should be used to improve the purchasing operations is that instant messaging. This is usually done through the instant-messaging applications or the websites, and it can be used in the improvement of the purchasing operations in that it contributes to the achievement of success during negotiations. Instant messaging is very effective for longer discussions as compared to the texting. It can be used when people are in different locations and can lead to the achievement of the desired lucrative deals in the business. Unlike the face to face modes of communication, it is effective in that individuals can get a chance to take time to first think about an issue before responding for in the face to face communication, it’s hard for people to take pause so that they can first gather their thoughts before giving a response (Trajkovik, 2011). 

Using ICT to Improve Purchasing Operations

When an organization is purchasing any goods or services, there’s a need for a cost analysis to be carried out. One of the tools that I can recommend to be considered for analyzing the purchasing costs is the comparison of the competitive bids. This is considered to be the best way of carrying out a purchase cost analysis because asking the potential suppliers of their prices for the same product helps in the determination of the most reasonable price. This method cannot, however, be assumed as the total cost analysis because the lowest bidder may not at times offer substandard goods which would make the company incur huge costs and thus there is a need for the total cost acquisition to be analyzed well and a quote given on the reason for choosing a certain quotation. The total cost acquisition should take into account the real costs such as the cost that would be incurred if the lower cost product is chosen to ensure that it performs to meet the required standards among others (Pooler, & Pooler, 1997). 

The other tool that I can recommend for purchase cost analysis is the comparison of the prior quotations. In some cases, it is important to compare the quotations made within the last two years for the same product because it greatly assists in the determination of the viability of the currently made quotation. This is important especially when a supplier is urgently needed. This is considered to be convenient because solicitation of all the competitive quotes that are available is likely to be time-consuming and thus comparison with the quotations made in the last 24 months can greatly aid in saving time and hence avoiding the delay of the procurement process.

The other recommendation that I can offer for use in carrying out the purchase cost analysis is the comparison of the published list of the prices. This method of analyzing the cost of the purchases should only be employed if the materials are adequately similar to the products or the services that are publicly available and those which prices are likely to appear in a published list. When making a comparison of the prices indicated in the lists, it’s important to take into account the standard discounts that are offered in the industry for the respective items. The other recommendation that I can offer when carrying out a purchase cost analysis is looking into the prices that have been set by the law. The prices of some of the products used in the various industries are usually set by the law, and in the case of such items, Apple should reference the given pricing structure at the time of procurement (Weele, 2005). Similar item comparison can also be used in the carrying out of a purchase cost analysis. In the case where the item that is being purchased is fairly unique, a comparison of the items that are similar what being purchased should be made. Statements on the reasons why the items that are common cannot meet the set specifications should also be issued so that they can reflect the cost comparison in the analysis. 

Tools for Purchasing Cost Analysis

Conclusion   

To sum it up all, it is clear that the procurement manager should ensure control of the cost of the goods purchased, the level of the inventory and also provide that the organization has a good relationship with the suppliers. The goals of Apple Company are to achieve growth, create a sustainable advantage and also achieve cost leadership. The company should thus ensure that it selects the right suppliers. To achieve, it should take into consideration some important factors such as reliability, money, service, and quality. The company should ensure that it does not focus on the cost of procurement only because; cost alone cannot be used in the determination of the most effective supplier. This is because the lowest bidder may offer low-quality goods and products which are likely to add a burden to the company in the long run. To achieve improvements in the procurement operations, the company should consider the various methods of ICT for communication such as emails, instant messages and video conferencing among others.  These methods are very effective in that they allow for the communication between the parties involved and thus a corrective action can thus be taken in case there is a problem. Lastly, when Apple should ensure that it performs a purchase cost analysis before making any purchases. The tool chosen should be suitable to meet the current needs of the organization effectively.

References

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Davies, P. (2013). Business information systems. Houndmills, Basingstoke New York: Palgrave Macmillan.

Grady, J. (2009). Apple Inc. Westport, Conn: Greenwood Press.

Johnsen, T., Howard, M. & Miemczyk, J. (2014). Purchasing and supply chain management : a sustainability perspective. New York: Routledge.

Kahraman, C. & O?ztays?i, B. (2014). Supply chain management under fuzziness : recent developments and techniques. Heidelberg: Springer.

Kotzab, H., Pannek, J. & Thoben. (2015). Dynamics in logistics : proceedings of the 4th International Conference LDIC 2014, Bremen, Germany. Cham: Springer.

Monczka, R., Handfield, R., Giunipero, L. & Giunipero, L. (2015). Purchasing and Supply Chain Management. Boston, MA: Cengage Learning.

Moser, R. (2006). Strategic purchasing and supply management : a strategy-based selection of suppliers. Wiesbaden: Dt. Univ.-Verl.

Pooler, V. & Pooler, D. (1997). Purchasing and Supply Management : Creating the Vision. Boston, MA: Springer US.

Shah, K., Gorty, V. & Phirke, A. (2011). Technology systems and management : first International Conference, ICTSM 2011, Mumbai, India, February 25-27, 2011. Selected papers. Heidelberg New York: Springer.

Trajkovik, V. (2011). ICT for local governments : standards, principles and best practices. Skopje: NALAS.

Weele. (2005). Purchasing & supply chain management : analysis, strategy, planning and practice. London: Thomson Learning.