a centralized and integrated Purchasing organization can be adopted as it has the below-mentioned advantages:-
Centralized purchasing is quite a cost-effective method of the duplication of buying function is avoided and thus it will have a better efficiency.
2) The responsibility of buying the departmental or unit buying will not be on the Manager of manufacturing departments, departmental heads, and office managers and thus they can focus on their prime responsibilities and jobs.
3) This method can be quite useful in acquiring the specialized skills of the buying staff members.
4) The bargaining position of the organization gets strengthen as it buys in bulk and it can also result in quantity discount and a direct contact with the supplier can be maintained removing any kind of intermediaries.
5) It is possible to have a healthy relationship with the suppliers and suppliers also have a good relationship with the limited purchasing organization and thus can pass some benefits to these firms.
6) The buying of standardized items through standardized procedure can be obtained.
7) It is not required to maintain the minimum number of inventories at different centers rather that it will be ensured in the centralized location and thus the investment in inventories will be reduced. the stock levels, recording material usage, lead time and prices will be managed effectively by the staff of purchasing department.
A cross-functional team is a combination of high performing multi-functional employees so that they can facilitate the improved results on supply related activities and thus improve the performance of the organization overall by reducing the cost by controlling the time and with improved stakeholder buy-in. The main method which will be adopted by this group is working simultaneously rather than working in sequentially. This group can be divided into three groups – sourcing, new product, and commodity management. The team memebrs can be from different department of the organization. The main focus of these three sub-eam will be to reduce the cost, evaluation and selction of suppliers, sourcing, expenditure analysis , consolidation opportunities, reducing development cycle time, creating good working relationship and rapport.
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