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Supply Management: TQM and CI

#1. Discuss the concepts of centralized vs. decentralized purchasing authority, identify their relative advantages and disadvantages, and provide examples of when each may be appropriate.

#2. Differentiate between the principles & practices of Purchasing & Supply Management used in the Public sector (e.g. Government) and the Private Sector (e.g. manufacturing and retail). What are the salient differences and how do these differences affect the establishment or buyer-supplier relationships and the implementation of the Purchasing & Supply Management processes?

#3. Discuss the transformation of buyer-supplier relationships? What are the three levels of buyer-seller relationships and their relative differences?

#4. What is the relationship between Total Quality Management (TQM) and Continuous Improvement (CI)? Discuss the roles of Quality Assurance and Quality Control and their relative importance in demonstrating this relationship? What is the role of quality in the development of an E-Commerce capability?

#5. Explain the role of Purchasing & Supply Management in new product development, specifications development and a standardization program. How can cross-functional teams be used to create specifications for new products and to set up effective standardization programs. Do TQM and CI apply to the development of specifications for new products and standardization programs?

Solution Preview

Hello, thanks again for using Brainmass. I apologize for the previous confusion regarding your questions. I've updated your solution to include all attached questions. Because of the topic of your problem, I made an assumption on your request for assistance that you were stuck only on Question #1. While we're not permitted to complete assignments for customer/students, I've attached my summary of several background resources along with a few ideas for examples to get you started. I look forward to assisting you again in the future, and as always, if I've misunderstood your request, please let me know how to better focus my efforts to assist you.

#1. Discuss the concepts of centralized vs. decentralized purchasing authority, identify their relative advantages and disadvantages, and provide examples of when each may be appropriate.
Centralized organizations consolidate power through decision-making ability into a few positions with little to no input from subordinate positions. This is helpful in that it enables companies to emphasize stability, consistency, and allows the company to remain very pure to founding principles. Specifically with purchasing, centralization offers the ability to "reduce dupilication of effort," pool corporate orders to leverage volume discounts, enables very effective inventory control, and consolidate transportation costs," (Q-Finance, nd). The primary drawback to centralization is the cost in diverse ideas and effort-employee creativity and initiative is stifled through the inability to affect change, and the strengths of local managers with relational systems cannot be leveraged.

Centralized purchasing is appropriate for large organizations with little segmentation. This leverages the benefits of volume discounts and limited transportation issues without giving up much in the way of local relational benefits. A manufacturing enterprise, even with many factories, would be an ideal candidate for centralized purchasing authority for their supply. Another consideration would be a service-based organization- office supplies are highly substitutable and any access to volume discounts would be value added.

Decentralized organizations emphasize division of labor across divisions and authority levels. This is helpful in that it encourages personal initiative across the organization-coupled with effective motivational systems, decentralized authority leverages strengths from more employees. For example, a decentralized purchasing authority may have extensive knowledge of the local supply market, as well as the personal relationships to best leverage ...

Solution Summary

Five questions answered regarding purchasing and supply management, in both public and private sectors. Discusses the evolution of buyer-supplier relationships, total quality management (TQM) and continuous improvement (CI), and product development cycles. References included.

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