Eskom Procurement Book 2015

PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT

• Green supply chain – National governments across the globe have become stricter in their environmental regulations. Consumers have also become more environmentally conscious, preferring to buy goods and services from organisations that are environmentally friendly. This has influenced the procurement function in that it too has to consider environmental aspects when sourcing from suppliers. Organisations are therefore increasingly creating procurement policies that emphasise sourcing products and services that are less environmentally damaging. • Product life cycles have become shorter – Customers have become more selective and critical, which requires shorter product lead times and faster, more flexible distribution decisions. • Buyer-supplier relationships – Procurement officers develop and maintain relationships with their internal and external business partners and concentrate on strategic partnerships with a few select suppliers. The mutual benefit of the buyer-supplier relationship is discussed in Chapter 5. • Procurement contribution to the bottom-line . Procurement has increased in importance and has become a strategic function that contributes to organisational profit [12, 20]. 1.14 CONCLUDING REMARKS Chapter 1 has laid the foundation for what follows in subsequent chapters. It has discussed the relationship between supply chain management and procurement management; the principles of supply chain and procurement management; procurement functions; procurement processes; procurement documents used and procurement organisations. Procurement management was discussed from a supply chain management perspective. The key types of products and services that procurement is typically engaged to procure were also discussed. The chapter concluded with the importance of supply chain and procurement management, including key trends and developments. Croom S.R., Romano P. and Giannakis M., Supply chain management: An analytical framework for critical literature review, European Journal of Purchasing and Supply Management, Vol. 6 (Issue 1), 2000, pp. 67-83. [2] Li S., Rao S.S., Ragu-Nathan T.S. and Ragu-Nathan B., Development and validation of a measurement instrument for studying supply chain management practices, Journal of Operations Management, Vol. 23 (Issue 6), 2005, pp. 618-641. [3] Kale P. and Singh H., Managing strategic alliances: What do we know now, and where do we go from here?, Academy of Management Perspectives, Vol. 23 (Issue 3), 2009, pp. 45-62. 1.15 REFERENCES [1]

23 CHAPTER 1