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Name :Anam Shoaib

Reg # L1F11MBAE2058
Supply Management (Section D) Assignment No.1
Dated: April 15
th
, 2014

Question: 1
How can an effective purchasing department affect organizational performance?
Answer: Effective purchasing department improves organizational performance by
Spending corporate funds wisely.
Operating in a professional manner.
Purchasing the right materials in the right quantities, at the right time and price, from the
right source.
Providing superior performance to the buyers which leads to better organizational
performance
Saving time and money
Reducing wastage
Managing inventory
Providing higher service levels
Managing suppliers in improving supply chain
Managing supplier relationships
Evaluating supplier capabilities
Selecting the total lower cost supplier
Purchasing of desirable, reliable, durable and cheap materials
Reducing purchasing cost
Avoiding deterioration as the customer of choice
Providing On time Delivery
Avoiding higher pricing because of cost of money
Avoiding increased personnel on non value added activities
Avoiding loss of supplier as a critical link in supply chain
Avoiding higher costs internally to the purchasing company





Question: 2
Do you feel that choosing an organizational design is simple? If so, explain why firms
would change their supply management organization structure.

Answer: No in my opinion choosing an organization design is not so simple .Organizational
design refers to the process of assessing and selecting the structure and formal system of
communication, division of labor, coordination, control, authority, and responsibility required to
achieve organizational goals and objectives, including supply management objectives. And
designing all these processes is little bit complex these days

In above mentioned chart there are three type of organizational levels firm can
choose anyone of them according to its requirement firm there are also three types
of organizational structures
Centralized
Decentralized
Hybrid
Choosing these structures is not easy because if you are fully centralized or fully
decentralized each has its pros and cons. And choosing Hybrid also depends on firm
requirements
Firms would change their supply management organization structure. because of
different reasons some reasons can be
The rapid changes innovations and evolution of new supply chain concepts (like vertical
integration to VAP, Mass customization)
To make their working more easy and flexible companies shifting from vertical
organization to horizontal organization and for this they have to change organization
structure

Changing trends and business requirements