Advantages and Disadvantages of Traditional Procurement Methods
1. In the contemporary business scenario of Jaques Limited, the management o the organisation has utilised two types of purchasing methods i.e. Traditional Procurement methods and Partnering or Integrated Procurement methods in the existing business environment. The advantages and disadvantages of the methods have been described as follows:
The traditional procurement method verifies the budget of the client and involves project leader to make the best decision. Also, the method has identified the responsibility of the contractors, consultants, clients, and other stakeholders associated with the business (Coss, 2016).
In this procurement, the client can control the team members of the consultants so that the quality of work cannot be compromised. Furthermore, the competitive tendering approach can offer the best price that can be accommodated by the firm (Plank, Reid and Bates, 2014).
Adversely, traditional procurement method can take significant time to complete a project as significant time needs to be invested in designing the concept. Also, clients have to face different firms due to the presence of many consultants.
In such procurement method, long-term commitment can be developed between two companies to achieve a target by maximising the efficiency of the resources available to the participating companies (Coss, 2016). As the organisation deals in the engineering industry, such procurement methods can promote team building to complete a project in a successful manner.
By using such procurement, the conflicts with the clients, contractors, and suppliers can be mitigated by developing suitable communication. Therefore, the disputes will also be reduced. The organisation has effectively managed the efficient working structure of the workforce by introducing integrated or partnering procurement concept (Coss, 2016).
One of the major disadvantages of the method is a lack of confidentiality of resources. Meanwhile, during partnering procurement, the information must be shared between the management that may lead to compromise of confidentiality. On the other hand, partnering charter can create legal disputes that have to be solved within the process.
2. In the contemporary business industry, stakeholders’ participation can be identified as one of the most comprehensive strategic choices for leading organisation. Through the identification of the stakeholders associated with the business, management can set up efficient consultation system involving the stakeholders. Meanwhile, the major stakeholders of the business i.e. investors, clients, employees, project manager, regulatory authorities, suppliers and trade associations must be handled in an efficient way so that the overall proceedings of business can be management according to the order (Rajgor and Pitroda, 2012). Decisively, specific meetings must have been arranged to discuss the status towards different stakeholders at the different level. Thus, any suggestions can be taken into account from stakeholders’ perspective. For investors and clients, scheduled meetings and site visit must be arranged to take their views on the progress. Precisely, based on the consultation, human resources, locations, staff amenities, supplies and stocks, technological equipment and machinery, and training materials can be arranged. Evidently, to lead a project in the right direction, views of every related stakeholder must be notified to avoid any conflict (Boxall and Purcell, 2013).
Advantages and Disadvantages of Partnering Procurement Methods
3. In order to identify the nature and level of resources available to the organisation, analysis of the information collected through management information system (MIS) must be made mandatory. Precisely, the requisite information and data relevant to the resources can be analysed using Wick’s model of organising, Critical Success Factor Analysis (CSF), and rationality principles to evaluate the best strategic information and knowledge about the resources (Rajgor and Pitroda, 2012). Meanwhile, the design of the information system must develop a network where the information collected as well as processed must be verified accurately. The need of information will be evident so that suitable information can be acquired through the information system.
Decisively, to analyse the data and collected information must be termed as quality information so that the reliability and viability of the data and information can meet the requirements. Effectively, the relevant information of the organisational resources such as descriptive, probabilistic, explanatory and unexpected information must be summarised to identify the existing scenario (Hogler, 2016). On a broader term, theoretical frameworks and concepts can be utilised to process and analyse the information. Thus, information that has been collected from various sources within the organisation can be interpreted to define the right set of strategies. Apparently, modern software system and rationality model can be taken into account to solve the challenges relevant to the organisational resources (Loader, 2016). In this way, the overall analysis can be effective for long-term success of the organisation.
4. The action plan to acquirement and allocate resources by incorporating strategies to maximise efficiency and manage risk has been presented herein below:
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.Action Plan to acquire and allocate resources |
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Milestones |
Activities |
Description |
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Analyse Resource Requirements |
Study Business Objectives |
The resource manager needs to study the business objectives and understand the targets of the firm. |
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Consult key stakeholders |
The key stakeholders such as suppliers, customers, investors, and employees must be consulted to observe the resource required for the proceedings. |
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The resources required by the company must be analysed in terms of their costs and benefits (Thacker, 2012). |
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Identify resource sharing opportunities |
The opportunities to share the resources within the organisation must be identified to further plan the resource requirements. |
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Develop Resource Plan |
Determine internal resourcing capability |
The internal availability of resources must be identified. |
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Determine External resourcing requirement |
The resources to be acquired from the external sources must be identified |
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Develop detailed resource acquisition and allocation plan |
On the basis of the availability of resources and resources required by the company, a detailed resource acquisition and allocation plan needs to be developed (Thacker, 2012). |
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Develop procedures to evaluate the resource acquisition and allocation process |
The procedures to monitor and evaluate the resources acquisition and allocation process must be identified |
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Risk Management Planning |
Identify potential risk |
In order to identify the risks, effective information and reliable data must be collected to analyse the risk. |
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Analyse the level of risk |
Precisely, risk analysis should be done to evaluate the significance of the risks attached to the business scenario. |
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Develop risk mitigation plan |
As per the order of the risk, effective risk mitigation plan can be drawn so that long-term business viability can be retained (Thacker, 2012). |
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Obtain approval from senior management |
Report to the senior management |
The senior management must be reported regarding the resource requirement and the entire plan to acquire and allocate the resources. |
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Get approval |
The approval of the top level management is required to proceed with the planned strategies. |
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Acquire and allocate resources |
Acquire resources in accordance to the plan |
The necessary resources must be acquired in accordance to the plan. |
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Allocate resources in order with the legislations, policy and practices |
The resources must be allocated after considering the legislations, policy and practices of the organisation. |
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The allocated resources must be managed in order to enhance the efficiency of the organisation (Thacker, 2012). |
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Monitor the acquirement and allocation process |
The entire process of implementing the resource acquisition and allocation plan must be monitors and performance of the process must be documented for future reference (Loader, 2016). |
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Review and Report |
Review and report resource allocation |
After the resource allocation, orderly review and reporting must have been conducted to maintain transparency. |
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Monitor compliance with project budgets and other constraints |
According to the project budgets and estimations, the monitoring process should be organised. |
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Prepare report to indicate the level of performance achieved |
Evidently, reports need to be charted to identify the improvement in performances (Loader, 2016). |
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Replan the process as per requirement |
By evaluating the reports and analysis, the procedure must be restructured according to the requisite. |
5. A proper resource planning is the key to incorporate efficient use of resources into work practices. However, the efficiency cannot be improved unless the initiative is supported by the management and employees of the firm. Hence, a proper communication of the resource acquisition and allocation plan must be needed in order to influence the employees to work according to the planned strategies (Loader, 2016). Furthermore, a training session can be conducted to make the employees aware of the ways to use the resources in the best manner. Therefore, proper communication with the management and employees will help to implement the plan and incorporate efficient use of resources into work practices.
In order to monitor the use of resources against budget and business objectives, the management requires effective performance evaluation techniques. For example, benchmarks can be used to monitor the resource use against budget. On the other hand, KPIs and performance standards can be used to check whether the new resource allocation process achieves the desired targets of the management (Loader, 2016). For example, the percentage of time utilised by a particular resource and the increase in the sales percentage can be used as indicators to monitor the use of resources with the business objectives of the firm.
6. According to the objective of the organisation, the expected level of performance achieved can be reflected by figures of sales achieved and the profit achieved due to the new allocation of resources. For instances, the sales and profitability of the firm must increase by around 5-6 percent to achieve the expected level of performance. Furthermore, the percentage of resource time utilization and time available by the resource can be monitored to evaluate the level of performance achieved (Lewis, 2014). On the basis of the evaluation of the expected level of performance achieved, necessary changes such as time of utilising the resource and allocation of resource in other departments can be performed in order to meet the service and product delivery standards.
References
Boxall, P. and Purcell, J. (2013). Strategy and human resource management. 1st ed. Basingstoke, Hampshire: Palgrave Macmillan.
Coss, L. (2016). Procurement methods. 1st ed. Bookbaby.
Hogler, R. (2016). Transforming employment relationships: Implications for human resource management. Human Resource Management Review, 6(1), pp.75-88.
Lewis, P. (2014). The over-training of apprentices by employers in advanced manufacturing: a theoretical and policy analysis. Human Resource Management Journal, 24(4), pp.496-513.
Loader, D. (2016). Advanced operations management. 1st ed. Chichester, England: John Wiley.
Plank, R., Reid, D. and Bates, F. (2014). Barter: An Alternative to Traditional Methods of Purchasing. International Journal of Purchasing and Materials Management, 30(1), pp.51-57.
Rajgor, M. and Pitroda, J. (2012). Contribution Of Advanced Technology: Automated Data Collection In Resource Management. International Journal of Scientific Research, 2(3), pp.124-128.
Thacker, R. (2012). Introduction to special issue on Human Resource Management certification. Human Resource Management Review, 22(4), p.245.
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