Discuss Procurement, Logistic and Manufacturind (Essay Sample)

1 a) Procurement is the acquisition of goods, services or works from an external source. It is favorable that the goods, services or works are appropriate and that they are acquired at a cheap price hence satisfaction to the person acquiring them. Procurement involve the determination of how the ordered products necessary for producing goods or services can be delivered on time and within the allocated budget. These process includes five major steps; specification, selection, contracting, control and measurement
b) Manufacturing is the production of goods which are sold to the wholesalers who then sells them to the consumers for the final use or purpose. These goods are produced in large quantities for economic purposes and are later supplied to the consumers at a profit. Most of these firms are managed by the governments and they are supplied from a central point to the consumers.
c) Logistic is where the flow of goods are controlled and managed between the point of production and that of consumption in order to meet requirements of customers or corporations. It involves setting of the targets, fulfilling the targets and controlling the process of procurement. The resources in the procurement such as food, materials, animals, equipment and liquids as well as abstracts items like time, information, particles and energy are managed so that set objectives are achieved. The information flow during the logistic process are integrated, materials are handled as well as inclusion of production and packaging in the logistic procedure.
2) Outsourcing is an allocation of specific business processes to a specialist external service provider which involves the transfer of the management and day-to-day execution of an entire business function to an external service provider.
A. i) One of the pros of outsourcing in procurement is that there is risk management leading to low risks especially in investment because it is done through partnership with an outsourcer who is able to provide mitigation. Outsourcing certain components of the business process helps the organization to shift certain responsibilities to the outsourced vendor. Another advantage is that it eludes the possibility of hiring individuals within the firm origin thus it cut the cost of recruitment
Cons of outsourcing in procurement are that investment may be several hundred kilometers away from investors; another con is that when organization outsources HR, payroll and recruitment services; outsourcing in procurement involves a risk if exposing confidential company information to a third-party.
ii) Pros of outsourcing in manufacturing are that there is lower cost and it is cheaper to rent a factory and its workers than to employ the new ones. Many manufacturers offer services, store and ship products as well charge for the space provided or the services that are bought. There are also lower tariffs and duties, and local market access; outsourced labor especially overseas which include technically skilled and highly educated workers. The advantage of having support workers who can respond to organization global customers in many languages is a significant asset.
Cons of outsourcing in manufacturing: conducting manufacturing overseas can become a problem. Bribery is against the law in some countries like US while in some countries it is not and the top management in the government is the one encouraging it through involvement in corruption practices. This is disadvantageous to factories because more money will be spent in convincing the government or other officials to allow them to operate because they will ask for some token before allowing operation of the company within the country. Another con is that outsourcing factory’s production particularly overseas usually means that company cede a certain amount of daily control to the contractor and this may lead to the competition for customers with other companies. Availability of quality local vendors, missed signals concerning job requirements and substandard product quality is possible negative outcomes of choosing to outsource factories production.
iii) Pros of outsourcing in logistic: there is customer relationship that makes logistics outsourcing arrangements to be successful. Customer service actions are initiated by customers presenting requirements whereas customer relationship is active not only solving problems but also maintaining close contacts. Customer relationship develops strong and lasting ties to customers by anticipating their needs rather than simply reacting to their dissatisfaction. Another pro is that there is a performance assessment index in logistics outsourcing which includes both cost and service measures. The perfor...