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Assignment on
Case 03 : Verizon Wireless
Assignment Topics:
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Assignment
Introduction:
Verizon Wireless is a telecommunications company that provides wireless services to
customers in the United States. It is a subsidiary of Verizon Communications, which is one of
the largest communication companies in the world with a network that established in April 4,
2000 and covers more than 98% of the U.S. Verizon Wireless is known for its strong network
coverage, which includes 4G LTE and 5G technology, as well as its high-speed data plans.
Key Points:
Subscribers
Churn Rate
‘Test Man’ advertisement
High speed wireless network
Apple’s marketing
Customer care function
Direct Procurement: This kind of procurement involves any goods and services used during
the production process. This includes raw materials, machinery, and other components.
Indirect Procurement: Goods and services purchased under this type of procurement are used
to meet the operational needs of a business. As such, they don't contribute to the company's
revenues. This may include office equipment and supplies, furnishings, and marketing.
Goods Procurement: Any physical products that businesses acquire through the procurement
process to serve the needs of the business. This can be direct or indirect, such as raw materials
and office supplies, respectively.
Services Procurement: Like goods procurement, there are two types of services procurement:
direct and indirect. Both rely on services provided by people. Direct services procurement may
refer to labor that is directly involved in the business. Indirect services procurement can
include things like on-site security to safeguard the premises.
How Procurement Works
Procurement and procurement processes can require a substantial portion of a company’s resources to
manage. Procurement budgets typically provide managers with a specific value they can spend to
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Assignment
procure the goods or services they need. The process of procurement is often a key part of a company's
strategy because the ability to purchase certain materials or services can determine if operations will
be profitable.
In many cases, procurement processes will be dictated by company standards often centralized by
controls from the accounts payable (AP) division of accounting. The procurement process includes the
preparation and processing of a demand as well as the end receipt and approval of payment.
Comprehensively, this can involve purchase planning, standards, specifications determination, supplier
research, selection, financing, price negotiation, and inventory control. As such, many large companies
may require support from a few different areas of a company for successful procurement.
There are several steps involved in the procurement process:
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Assignment
minimize risks. You can use the terms and conditions outlined in the procurement contract as a marker
against key performance indicators (KPIs), which can allow you to manage supplier relationships and
address any potential problems that may occur during your company's procurement process.
Maintaining a good relationship with key suppliers can play a vital part in future procurement needs.
vi. Arranging and receiving products or services
At this stage, the supplier delivers the promised products or services within the specified timeline.
After receiving them, your company's purchasing officer checks the order and notifies the supplier of
any issues. The supplier may also perform installation and training.
vii. Conducting quality assurance
To determine if you want to reorder the product or service and continue with your supplier, now need
to review your experience through rigorous quality assurance.
2. What is SCM and it functions?
Supply chain management is the management of the flow of goods and services and includes all
processes that transform raw materials into final products. It involves the active streamlining of a
business's supply-side activities to maximize customer value and gain a competitive advantage in the
marketplace.
The main objectives of supply chain management involve the management of a wide range of
components and processes, such as storage of raw materials, managing the inventory, warehousing,
and movement of finished goods from the point of manufacture to the point of consumption. In
economic terms, it can be referred to as the design, planning, management, and execution of supply
chain activities from the point of production to the point of sale.
Supply Chain Management Functions
On a broader level, supply chain management consists of these four major functions and key element
components, such as:
Integration
This forms the crux of the supply chain and is meant to coordinate communications to produce
effective and timely results. It can include innovation of new software or advanced technological
processes to improve communications.
Operations
This involves management of day to day operations in the ecommerce business. For example, it may
deal with keeping an eye on the inventory or coming up with marketing approaches.
Purchasing
This deals with the purchasing decisions and management, such as purchasing raw materials, source
materials and so on.
Distribution
This deals with the management of logistics across wholesalers, retailers, and customers. This may
mean keeping an eye on the shipment, and other details.
In addition to these, there are also some subsidiary functions that an effective supply chain
management process fulfills, such as:
Procurement supports the functions of your business by offering the inputs needed to run day-
to-day operations.
Supply chain management addresses how those inputs are transformed into end products and
delivered to consumers.
Procurement exists as a branch of supply chain management, and it narrows down to getting
goods to buyers.
Procurement and supply chain management are related, but there are some subtle differences between
the two processes. Procurement is how a company sources goods and services from external suppliers,
while supply chain management is the management of all the processes and steps that must be taken to
transform raw materials into final products and deliver them to customers.
Procurement is a subset of processes within supply chain management that focus on the identification
and acquisition of goods. Supply chain management is a broader set of processes that also includes
vendor selection, logistics, invoicing, and distribution
Procurement and supply chain management are similar in various ways. Here’s an overview of the
similarities between procurement and supply chain management;
Both procurement and supply chain management help in delivering the goals and targets of
your business.
Procurement and supply chain management are both internal operations and may hence require
external stakeholder inputs, but their core still remains within your organization.
Procurement and supply chain management should be managed proactively so as to support
the operations of your business.
Difference:
Expedite and receive the Asses supplier performance Customers can now buy
ordered items
A bakery buys flour and sugar to produce cupcakes using direct sourcing
A construction company buys concrete, cement, and subcontracted labor to construct a
building
A steel mill buys raw materials (iron) and equipment (a blast furnace) to produce steel
Indirect Procurement: When a company buys indirect materials that are not directly related to the
production process but only facilitate it.
Examples:
Difference:
Sourcing Procurement
Sourcing takes care of everything from finding suppliers, Procurement involves procuring
vetting & contracting them, and maintaining a healthy chain goods and services needed for the
of vendors to cater to the organizational needs organization.
Focuses on the who that makes the supplies possible Focuses on the what of supplies
Sourcing is concerned with building and managing supply Leverages supply chains to ensure a
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Assignment
Procurement Purchasing
Activities related to acquiring goods and services Functions associated with buying goods and
services
Steps that happen before, during, and after The straightforward process of purchasing
purchase commodities
Used in a production environment (internal Used in a wholesale environment (external
process) process)
Puts more importance on an item’s value than its Tends to focus more on the item’s price than its
cost value
Refers to a set of tasks that spot and fulfill needs Refers to the specific task of committing
expenditure
Includes need recognition, sourcing, and contract Includes ordering, expediting, and payment
closure fulfillment
Follows a proactive approach to spot and fulfill Follows a reactive approach to satisfy internal
needs needs
Relational–focuses on creating long-term vendor Transactional–focuses on transactions than vendor
relationships relationships
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Assignment
Source:
1. http://www.rfpsolutions.ca/rfpportal/wp-content/uploads/2009/11/
Jon_Mak_IPPC6_What_is_Procurement_3Mar2014.pdf
2. https://www.investopedia.com/terms/p/procurement.asp
3. https://www.shiprocket.in/blog/supply-chain-management-functions/
4. https://humanitarianglobal.com/similarities-between-procurement-and-supply-chain-
management/#:~:text=Both%20procurement%20and%20supply%20chain,still%20remains
%20within%20your%20organization.
5. https://kissflow.com/procurement/difference-between-procurement-and-supply-chain-
management/
6. https://www.pipefy.com/blog/procurement-supply-chain-management/
7.
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