Answer to Question #225085 in Management for Ranux

Question

with relevant examples, discuss how purchasing function can lead to competitive strategy supply chain management environment 

Answer 1

A competitive strategy is the organization’s ability to provide products and services with more value in the customer’s eyes than their competitor. The best example of using purchasing function to develop a competitive strategy in supply chain management is the strategic alignment, integrating purchasing strategy and business strategy. For instance, an organization can create a purchasing portfolio model. In this case, an organization can choose to purchase from a wide range of suppliers to avoid dependency on a single supplier, thus reducing the risk of a shortage of supplies in the chain of supply. Focus on quality is another to implement purchasing function to achieve the competitive strategy; for instance, an organization can evaluate the quality of the suppliers in terms of products, reliability, and delivery. Purchasing locally can also help develop a competitive strategy in a supply chain management environment. Local purchase reduces waste, shipping costs and builds the company’s reputation within the local market.