Strategic Purchasing and Supply Management

Lecturer : Dr Joe Sanderson

Introduction and Aims

The importance of being able to effectively manage supply inputs varies between organisations. Most financial institutions, for example, have a relatively limited reliance on suppliers (outside of their IT requirements). For engineering companies like Rolls-Royce, IT / strategic consulting firms like IBM and supermarket giants like Tesco, however, the effective management of suppliers is critical.

For such organisations, the quality, technology, innovation, cost and delivery performance of their suppliers has a far-reaching impact upon their ability meet the challenges of their competitors and the demands of their customers. This course discusses in detail the process by which the effective management of supply inputs is achieved, however important that task is to the organisation concerned.

The course is largely organised in accordance with the different stages of the purchasing and supply management process – from the product or service specification right through to the supplier development activities that might occur during the contract period. While possessing a significant theoretical element, the course also accesses considerable case evidence.

By the end of the course, students should not only have a firm grasp of the economic and management concepts relevant to the purchasing and supply management process, but also recognise what a challenging and critical activity the process is for many of the organisations they work for or will work for in the future.

On the basis of the above description, the course has the following three broad objectives:

  • To provide students with an understanding of how firms or public sector organisations might effectively manage their supply inputs;
  • To achieve this by developing students’ understanding of the intellectual concepts which underpin this subject;
  • To supplement this conceptual understanding with a practical understanding of how the concepts might be implemented by managers in real business situations.

Objectives and Learning Outcomes

By the end of the course students should:

  • Understand how the make-buy and outsourcing decision prefaces the management of the purchasing and supply management process - and how that decision should be made
  • Understand the objective of managing the purchasing and supply management process, namely value for money
  • Understand how the management of supply is affected by the strategic posture of the organisation
  • Recognise the standard purchasing and supply management process
  • Recognise the economic concepts that are relevant to the different stages of the process, for example, opportunism, trust, bounded rationality, adverse selection, moral hazard, hold-up, internal demand management, property rights, reputation and contingent renewal
  • Be able to apply the concepts to real-life business and public sector situations
  • Be able to develop a complete strategy for an area of expenditure

Assessment

Continuous Assessment:

  • One group assessed case exercise (25%)
  • One 2000 word individual essay (75%)