BBDS2033 PROCUREMENT MANAGEMENT

Tutorial #13

1. Contrast between international and domestic procurement.

2. Discuss the major advantages of procurement internationally.

 The buyer may be compelled to go abroad to get what is required. Many raw materials are
not produced at all in the UK: for instance, cocoa, coffee, cobalt. The UK traditionally
imported raw materials and exported manufactured goods. Some countries, on the other
hand, export raw materials and import manufactured products that are not produced by
their domestic industries.
 The buyer may prefer to purchase from a foreign source which offers features not available
on domestically produced goods of a similar type. Technological innovation occurs all round
the world.
 Although goods of the type required are produced domestically, domestic capacity may not
be enough to meet demand, so the gap must be filled from abroad.
 There may be strategic reasons for international purchases, for instance, to Improve supply
security by having a second source in another country.
 It may be possible to buy equivalent goods more cheaply abroad, because of larger
quantities, lower wages, better productivity, better plant, or the rate of exchange.
 Countertrade may compel your firm to buy abroad. Sometimes it is not possible to win an
export order without agreeing to a reciprocal import order.

3. What are the disadvantages faced by an organisation due to doing international procurement?

4. What is e-Procurement? Will you, as a procurement manager, carrying out e-procurement in

your organisation? Discuss.

5. Discuss the risks arise to an organisation carrying out e-procurement.