Many companies apply decentralized purchasing procurement. However, companies whose production system are located in one place have adopted a centralized purchasing system. Microsoft is an example of the centralized procurement system, Paul Allen and Bill Gates access every project and initiatives before providing a direction to the company employees. The company’s purchasing processes vary based on the financial plans bulk of the products as outlined by these founders. However, adopting decentralized purchasing could play a significant role in addressing the recently noted issues especially complains from the employees operating from the global stations. Decentralized purchasing ensures that each office has the purchasing power to order the supplies, thus no approval is required for the process to occur. Even though the system is expensive to adopt, it would provide an opportunity for the company to achieve its vendor sourcing cost and supply integration objectives
Being one of the classic centralized purchasers, Microsoft relies on one individual to provide decisions and directions of the company. Most often small companies often use this structure since the owners are required to make the decisions and develop strategies needed in the company’s success. On the contrary, Microsoft has outgrown the level of small business, thus requiring new purchasing structure. Furthermore, recent concerns have been raised regarding organizational leadership which is not charismatic due to centralized decision making.
The reason for adopting a centralized approach was based on the fact that the vision of the company was based on the founder of the project. Moreover, its goals required micromanagement the required strategies to achieve organizational goals
The decentralized system to allow the employees to have a contribution to the decision-making process. It promotes effective management of the global center and fosters innovation. It facilitates cost management and supports appropriate vendor sourcing strategies. Innovation is the key to the development of a reliable and new product that address market needs. The system would provide a timely supply of the required materials and give a chance, to address quality issues linked to purchases of materials.
Furthermore, the process would send primary complains recent raised by the employees. For example, it improves the management of organizational structures and promotes the immediate reduction of the noted risks linked Besides. It develops leadership skis among other employees thus providing an opportunity appropriately utilize decentralized substructures
Most often the employees are not happy when exposed to much supervision and control. They often need the freedom to develop precise plans linked to the development of new strategies and promoting marketing to organizational programs. Decentralized systems thus provide an opportunity for this kind f practice.
A decentralized system would provide an opportunity for appropriate assessment, of vendor sourcing suppliers. With the rising issues regarding cost and budgeting conflicts, assessing the views of every manager would reduce the risk and promote appropriate decisions that encourage productivity. Microsoft procurement system is committed proactive innovative and costs effective global solutions that manage of compliant suppliers. Vendor sourcing cost objectives can be achieved through the collective efforts of every employee. The process can be achieved when departmental managers have freedom in implementing the best policies for meeting cost objectives.
Supply chain integration objectives aim to improve performance and develop appropriate relations between the company’s stakeholders. It also aims to optimizing customer services. Significant purposes of supply chain integration seek to promote efficiency and enhance product availability. Decentralized structured management thus provides an opportunity for achieving the goals. Besides, it improves accountability and communication across Improving customer services, therefore, require immediate action and decisive action which can be achieved in the decentralized system. On the other hand, a centralized system could provide similarly efficient customer service provision. However, it could be timely since decision making relies on one person.
Business regulation varies from one level of business to the other. At the local level, the appropriate vendor sourcing supplier cost promotes aggressive cost management and handling the rapidly changing demands patterns of the operating models. It also provides an opportunity for the leaders to address significant cost challenges through the centralized system. Similarly, adhering to the regional regulations through vendor sourcing objectives can be achieved through centralized systems with a limited need of having many consultations and the views of the employees. O the other hand, global regulations provide an opportunity to achieve the objectives through decentralized purchasing.
Structuring the company’s purchasing process is crucial in addressing the company’s purchasing systems. Without appropriate structuring system then the company would face a challenge in controlling costs of purchases. Most of the large companies have many departments with their purchasing protocols. Thus a decentralized system is one of the appropriate solutions to such companies. However, it can be risky especially when the department leaders
The primary goals of vendor sourcing suppliers are to meet the right suppliers at the right places. Thus the selections would be governed by process affordability and reliability. Reliable suppliers provide timely services with the required product stability. One of the top challenges of centralized supply management is the ability of the leaders to weigh the cost with the efficiency and product suitability however realizing cost efficiencies is one of the primary goals of the decentralized leaders. Through the decentralized system, each leader has a role to play in addressing the financial crisis and developing reliable fiscal outcomes such as addressing uncertainties and cutting the gross domestic product by a certain percentage
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