Question

1.Lean procurement may have a lot of advantages but it could be difficult to implement. Procurement must be prepared for challenges and problems in the implementation process.

Suggest the adjustments applying lean principles to purchasing in an organisation.

Answer 1

An organization can increase its profitability through applications of lean purchasing with the following strategies:

1) Plan proper to make an appropriate list of items or raw materials to be procured. Every strategic move will increase the chances of reduced cost of operations.

2) Approach towards quality vendor selections will be helpful in gaining cost advantage and maximum satisfaction in the purchase function of an organization.

3) A flexible inventory will reduce cost of carrying the raw materials as well as ordering cost at a larger scale.

4) Management of payment will also address the challenges of implementing the lean principles to purchase function of an organization. It must be given huge priority.

5) Continuous assessment of new vendors to be hired must be highlighted.

6) Just in time like manufacturing principles must be adopted so as to reduce inventory as well security issues .

7) Best practices in business like ethical standards and sustainability issues must be addressed.