supply

by HLA TUN KYAW Kyaw

Submission date: 09-Dec-2020 11:22PM (UTC+0800)

Submission ID: 1467328201
File name: 37619_HLA_TUN_KYAW_Kyaw_supply_26575_491683529.docx (25.26K)
Word count: 3168
Character count: 18287
“ I'rocurement has long been criticised for hay ing a tactica1, short-term t oc u s ‹illhou gh I here is ‹in

increasing focus on the medium and long term.” Do j’ou ‹igree’? Support j our ‹insw’er w’ith lheorj’
‹ind pr‹ic lices

Tactical procurement relies on the fast trading activity found in small and medium-sized
production teams. Tactical procurement plans are typically created by senior management within
the company or may not be developed by the company's procurement department. lf you need to
get a significant company plan, you usually need a tactical procurement plan. Tactical rneth‹x1s
can divide this large enterprise into smaller, more manageable goals.

For example, in this example, we will begin by accrediting all senior participants in the purchasing
department or by signing up for up to four special accredited education courses in 10 groups. All
of this will be completed within a year. Tactical procurement planning becomes increasingly
difficult, with many procurement departments, procurement and procurement departments, and
many professionals working in the procurement arena. In the event of a tactical procurement
emergency or a critical alarm, you are more likely to address this tactical procurement strategy.
Therefore, when developing short-term tactical sourcing solutions, you need to remain motivated
to implement long-term strategic sourcing goals.

h4edium and Long Terms Bu siness

The long-term business responsibilities of day-to-day manufacturing operations and management

are very different. Consider a medium-sized prr›duction company where the buying employer has
the activity and ability to utilize the penple of almost every delivery-based supplier. Usually, in
this case, the buyer will use sensible judgment to place an order with the supplier who offers the
cheap price, the cheap price, the best delivery time, the right date. These buyers or buyers do not
have a Buyer/Buyer Technology (Enterprise Resource Planning) platform or communicate key
advanced or higher skills from tactical to strategic purchases There are cases. Their top priority
is to keep the production line up and tactical sourcing is a high quality demand for this type of
operation. Primarily, tactics are the right way to "do the right thing" with these companies and
companies. A medium-sized manufacturing or manufacturing company where the purchasing
department can use almost any supply-based supplier. Customers who use this feature typically
assign orders to the company with the lowest price and highest arrival time. Routine management
of pr‹x1uction operations is far more important than dealing with long-term strategic
responsibility. This happens in many purchasing departments without time. From time to time,
buyers lose or fail their procurement platform or ERP software, or move from strategic to
strategic to a very advanced feature set. So their first job is to keep the production stock open and
running. Facial sourcing experts don't remember this as a g‹xid practice, but it's an accurate
technique. Therefore, tactical procurement is a good wish in this situation.

The procurement department of another organization or institution. Enterprise resource

planning technology can handle anything and there is a dedicated product team. When buying at
this organization, they choose from a small carrier library that they surveyed and select specific
suppliers who rely entirely on the company's expectations and potential to meet their needs. This
proprietary purchasing organization is far from the right technology. Organizations may choose
to design a hybrid approach using low-cost enterprise resource translation technology and a small
product specialist organization. Separation of responsibilities ensures that you have sufficient
strategic support to keep your business running when delivering the most important products to
your enterprise. You can discover this by assessing tactical sourcing versus strategic sourcing.
The buying process doesn't seem to be that strong. At the plan and method level, you need to
create a standard plan, but at the tactical level, your strategy should be honest.

Q.2 The challenges facing Drocurement and suDDly management in tne

Dost COVID-19 pandemic

The crisis of the coronavirus has brought unexpected fluctuation and fragility in modern supply
chain field. Most countries are experiencing devastating economic impact due to the crisis. As it
hit global economy faster than we expected, multinational companies experience shock of supply
and demand as most countries make people stay home. Only basic products and food products are
purchased by consumers which have strong impact on supply chain process. The decline of
domestic and international trade worsens week by week since the beginning of February to current
moment. Besides, every lockdown area has been experiencing downward slope of trades. lt
appears some challenging issues such as taking longer to be able to settle invoices. Alt hough a
faster payment trend was being applied previously. In 2019, it took 36.7 days in business field to
settle invoice and 36.8 days in 2018. In the beginning of 2020, it was 37.4 days of payment terms
to settle. The slowing down of new order affects the process of supply chain and hinder the
invoices behind. Even after the lockdown, although the factories are reopening, customers seem to
have lack of interest in buying unless it is basic items. Although some countries release lockdown,
their counterpart trading parmer countries are still under lockdown. lt also has great impact on
their supply chain process.

Countries around the world has experienced the vulnerability of supply chains which build on lean
manufacturing principles. For instance, in health care sector, the cost-effective masks and other
protective equipment were made in cheaper cost. The effect of lockdown in key manufacturing
areas have problem with supply chain as manufacturers have to struggle to rotate the supplier base.
As a result, in future, the global firms will probably diversify their supply chains instead of
depending on a panicul ar country. Consequently, manufacturing hubs such as Mexico, Vietnam
and India will probably have the opportunity from that case. To decentralize of manufacturing
capacity, some companies bring their production to home and it grows like flexible automation
and small batch production. This is a cost cutting way to bring supply chain to alive. In such case,
policymakers might force to manufacture in the country or particular places.

To build stronger and smarter supply chains with speedy recovery, digitalization and diverse
sourcing are the key factors. Although there are high-speed advancement in technology, the
relationship between consumers and sellers are still remaining in paper-based. Converting the
paper-based relationship into digitalizing is a fundamental key factor to have well-structure supply
chains as it saves a lot of time and energy. Thus, this current crisis bring advantage of converting
outdated process into digitalizing. By creating smart supply chains can be a weapon to protect
future supply chains crisis as well as benefits to build global trade.
Globally, today’s manufacturing process has been more advanced at the same time, more complex.
The ingredients or subcomponent to from a final product needs to be siinil ar or almost same
globally. The raw materials used to manufacture these subcornponents must be imported from
other part of the countries or across the continents. Furthermore, the finished or almost finished
goods will be transported to other places. lf the supply chains process is being disturbed, the
import, expnrt and manufacturing process will be in trouble. For instance, China exported
(APls)active pharmaceutical ingredients to India. During COV lD-19, Indian government banned
importing (APIs) from China. As a result, India’s pharmaceutical firm is having a difficult time to
maintain its export figures. Consequently, there will have a shortage on medicine globally as 1ndia
is the biggest common and collective medicine supplier in the world.

The other challenge is abnut procurement in sourcing organization. Earlier before pandemic, the
process of lower cost production has been very popular. However, during pandemic period, the
shortage of goods and demand hit the distribution rate. At the same time, distribution sector has
been experiencing challenges about direct distribution, proper and responsive allocating, staffing
at warehouse issues. The unusual impact on retailing is also noticeable. During lockdown pericd,
people are more interested in buying basic item than luxury items. Consequently, at consumer
view, hoarding of basic comm‹xlities and common medicine leads to peculiar stress to supply
chains. Typical consumers usually rush to buy essential goods and food products during pandemic
crisis. This unusual peak of demand makes supply chains fluctuate dramatically. In future,
factories can adapt and shift lines as there is changes in demand. Business will likely to convert to
digitalization and use cloud to be able to access remotely while employees can work from home.
This can also help business continuity without having significant loss.

One of the possible bright sides after COV lD 19 is that having possibilities of working from home
can make renewed focus on the principal of environment- friendly tasks. The main challenging of
global trade is forming the collaborative structure of business as there were many competitors.
However, the post COVID- 19 economic rebound is a global responsibility and the realization
should be a global collaborative effort. Procurement is a major role once the recovery plan is
implemented. Transparency, integrity and collaboration are essential part of post-crisis recovery
plan.
The Post COVID will have significant digital transformation as the business around the world has
been experiencing a lot of downturns. Technology will probably take place with newer strategy in
future. Using intelligent procurement process by using latest advanced machinery can bring
fruitful result too. The digitalization can help procurerrient leaders to accelerate the recovery after
pandemic along with proper oonsidemtion from short term to medium and long term to reshape
the organization. Contracting is critical matter in reviving and resettling small business as well as
infrastructure.

Part-B

Q-1 The imponance of public procurement as a tool for economic

development
The process of public procurement is quite bureaucmtic, institutionalized and legally complex
which is difficult and extremely competitive for SMEs and small firms to enter.

However, procurement has become a specific theme of upgmding Urban Innovation Partnerships
and it also benefits economic development and poverty. Directive seek is more flexible in
procurement which engage with potential suppliers before the products or goods reach to the
market. It also encoumges SMEs to participate in bidding, raising awareness to win the contract.
Today, procurement has encouraged for outsourcing with local or outside the country which can
have more exposure and development in oountry’s economy. Extending the network can bring
more opportunity to develop the country’s business and economy. Besides, investment of local
supplier, can also help to develop the country’s economy. In some countries like Australia,
investment in public infrastmcmre is a significant role in public procurement.
When small firms have potential to supply the public sector with variety of services and
goods, rangirig from low value to high value product or services, the suppliers’ market will boom.
It will become more oompetit'1ve with innovative strategy and reasonable prices. In this way,
procurement has beoome one of the strategic tools to achieve economic goals of a country.
Furthermore,long-term contracts, two stages tendering, single -sourcing and using e-
procurement are the best practice of procurement to reduce the cost and to bring better and
effective result in public procurement. Such cost cutting encourages local government
purchasing to consider partnership approach which is also known as consortia buying.
Public procurement is a key influencing factor in a country’s economic development.
Understanding and monitoring the country’s policy and regulatory and awareness on strategic
approach can enable to accelerate the country’s economy. If public procurement can be
implemented strategically, job — opportunit y, firm level grow’th, social inclusion and innovation,
impro›’ement in health care and education can also be boosted.

Q- 2. How “under-represented” business owner can engage with public

procurement opportunities
The public sectrir procurement is unlike private sector procurement. lt focuses on accountability
and transparency and it emphasizes legislation, process and policy.it serves directly or indirectly
on opportunity structure to suppliers. The highly institutionalized market with high standardization
limited SMEs to enter into the market they have limited resources. Due to the nature of the current
market, objectives are less important than value of money. Currently, single-sourcing, two-stages
tendering, long-term contract and e-procurement are the best way to save cost. For cost reduction,
consortia buying and bundling of the contract is the best way. E-procurement is very effective to
deal with a wider supplier pool by public procurers. However, e-procurement is out of reach for
small firms as it includes the awareness and ability of being familiar with online tendering
platforms. These procurement practices are the major obstacle for SMEs’ involvement in public
sector contracts. As they do not have sufficient capacity of supply to bid for the requirement of
public procurement. Due to the limited information and resources availability, SMEs business are
more successful below than in above- threshold procurement. Thus, the participation of larger
companies in tender submission is more than SME and other under-represented businesses. This
also brings significantly larger gap between small and medium enterprises, medium and large
enterprises. The larger the contract, the less opportunity for small firms to win. Furthermore, there
are other factors such as type of contract, sectors of gc›nds and service, type of procuiers, the
tender chosen and market aggregation influencing SMEs and under-represented firms to enter
public procurement. These institutionalized markets are shaped with long-term single sourcing,
strict niles and aggregate demand. These limitations make it challenging to small firms to enter.
These
markets are shaped with monopoly suppliers which can allow the smaller suppliers with the
possibility of sub-contracting.

However, the strategic choice and product market knowledge of owner-manager enable them to
enter the public sector market. Sufficient knowledge of what and how the public sector buys and
outsourced is a major break-in point of SMEs to win the opportunity to work with large
organizations. Thus, prior knowledge of the public sector market and how they operate, how to
deliver the requirement of clients are the key factors for SMEs and other under-represented
business firms to win the public sector contracts.

The willingness of the owner and passion of the manager shape most of these factors. Small firms
mostly benefit from their network to enter the public sector market. Relating to the extent of their
network to external relations for accessing the market, small firms have the opportunity to win in
public as well as private sectors. The knowledge of the product of the owner is also a strategic
resource which plays a vital role in winning the chance to access the public sector market. The
perception of business owners and managers and their willingness to take risks shape the
opportunity to enter the public sector market too. Capable management, skilled staff and buyer’s
requirements are also important parts to access public sectors. This is why, having courage to take
risk, having positive attitude towards taking risks, the resources (time, money, effort), strategic
choice, having adequate knowledge of product market ,procurement knowledge (including the
ability to write effective tendering bids) and strong network connection to external firms are
essential and key points to enter the public sector market.

Part B

Q.3 A. Estrange or engage with the public procurement opportunities

lf 1 were a small business owner, 1 would take the risk of entering to public procurement
opportunity. Especially during post COV lD- peri‹xl, most business are relying on technology and
reducing man power. Being familiar with technology can handicap in this time of crisis. To be
able to bid the contract or tender, small business owner needs to have expert knowledge on
procurement process with strategic approach. The perception of risk taking, confidence to take the
risk is the ability of the owner. Knowing the vigorous competition, the owner must confident
enough to compete in the market. Awareness on the prior knowledge of the market and resources
such as time, money and effort are essential to enter the public procurement. During post COV lD-
19 period, investors of local firms are willing to hire outsourcing in procurement sectors to reduce
the human resource of their firm. Foreign investors can’t also do procurement without the
knowledge of local procurement sectors. Besides, many emigrants are coming back to our country
due to the corona crisis. This is also an opportunity to hire outsourced people. Some organizations
hire local procurement specialists as an outsourcing expert. This can be an opportunity for small
firm owners. At this point, broadening the network of own business regardless of the size of the
firm is a key factor. lf the owner of the firm is broad-minded and has strategic network, it will be
an upper-hand to win the contract. However, it is very competitive market and has litrle chance to
win if the other competitors have equal or almost same quality. At any rate, staying in comfort
zone can’t make the business develop. Thus, grabbing the golden opportunity to compete whether
win or not can bring experience to learn for future growth. Having positive attitude and
willingness to take the chance can bridge to win the contract to enter public procurement.

3. B. The public procurement best practices and compete for profitable

work

To benchmark your procurement as best practices policy, organizations hax’e to follow some
important factors. Proper Alignment and staffing are one of the important factors to embed the
effective supply chain management. For some business, centralized operation is more effective.
Adopting hybrid approach of centralized approach combined with decentralized approach to get
consensus can have significant improvement. Placing contract management, forecasting planning,
procurement and other related management under the leader of supply chain although it can’t be
fit with all organization, it can at least give clear structure of reporting. However, no matter what
structure was adopted, correct staffing of the su pply chain is very important. The knowledge of
su pply chain of staff is a s’ital role. Thus, most effective organization hire strong supply chain
managers who have excellent strategic thinking, strong relationship and communication skills with
management .
Usirig technology will make workflows and processes more efficient and effective. It also saves
time and energy of man power. It is very important of using technology in order to to keep abreast
with current digital world. The skill of manager to extract and view the data with expert
knowledge of technology is an upper hand to benchmark the organization. Procurement
automation is an effective way to save money and time as well as to reduce unnecessary repetition
of process. Such digital transformation can make your procurement more efficient.

One of the main advantages of stmtegic sourcing IS focusing on total cost of ownership not only
on price. Currenfly, effective organizations give up the idea of receiving several bids and selecting
a supplier on price. Another important factor is putting coritracts under the function of supply
chain to avoid the failure of communication and monitoring the contract compliance.

It is important to follow the appropriate policles and procedure in supply chains management in
order to avoid the future possible risks. Risk mitigation decision should be integmted in supply
chain organization.

Overall, Best-in-town organization can make supplier engagement smooth by collaborating

partnering with vendors. This make win-win situation with vendors and build more tmst.

References
Vinay Sharma , April 15, 2020. COVID-19 Challenges and Response: How procurerrient
underpins the World Bank’s response tp the pandemic https://bloes.worldbank.on/voices/covid- l9-
challenges-and-response-how-pmcurement-underpins-world-banks-response-pandemic

https://www.researchqate.net/publication/2276Sl9SS Short-Term E-
Procurement Strategies Versus Lone-Term Contracts/citation/download
https://www.s1ideshare.net/DrGordonMurray/penriy-w1se-procurement-
strategieslonqtermeffectivenessshomermwins- I II121

https://www.weforum.org/agenda/2020/05/this-is-what-global-supply-chains-will-look-like-
after-covid-19/
https://www.supplvchainpuarterlv.cum/articles/475 -IO-best-practices-you-should-be-doine-now
supply
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