Purchasing and Supply Chain Management
In the recent past, procurement has become an undeniable aspect of corporate performance and has since drawn significant attention from the global environment. Most of the supply chain leaders are now required to manage a wide array of responsibilities that range from payment processing, vendor management, and needs identification (Wang, Han, & Beynon-Davies, 2019). However, the need to meet these aspects has caused procurement teams to face various challenges including the need for efficient risk management, brand image, keeping up with technological advancement, and global influence, all of which have affected their ability to meet procurement objectives. Advancement of technology has caused purchasing and procurement organizations to evidence issues related to staying updated, integration, lack of knowledge, and costly costs associated with upgrading the systems.
Technological Challenges in Purchasing and Supply Chain Management
The use of technology in purchasing and supply management helps to improve efficiency by reducing common problems, tracking data, and making purchases while tracking the progress. Technology is also used in tracking orders, analytics, storage and organization, inventory management, and streamlining of the entire process. However, although the adoption of technology has increased productivity and efficiency in procurement and chain management, procurement officers have had to deal with a fair share of challenges. According to Subramanian & Gunasekaran (2015) procurement often experiences technological issues owing to rapid evolution in IT and integration issues. The need to keep up with changing technologies makes it difficult for procurement officers to decide on the aspects that are likely to stand the test of time. The complexities that are involved in IT procurement often require the participation of various stakeholders and team players in the purchasing organizations. Additionally, some procurement officers may require project integration and the need for expert consultants who are believed to play a great role in the procurement of IT which is costly and time-consuming
Integrating IT purchases with a new system and rolling out such an integration often results in management challenges. According to 2019, such integration often requires an efficient understanding of legacy systems, reviewing current contracts, proof of concepts, and acceptance testing. The use proof of concept is essential in that it determines that the purchased concept has the ability to work as required, degree of customization, scope, and functional fit, among others. Although such a concept often provides an understanding of the implementation, the additional fee and time incurred by the procurement officers can result in project delays and additional costs.
Few suppliers, high costs, and deficient master data is another challenge that is associated with the use of technologies in procurement. Advancement in technology often causes high costs for procurement organizations to achieve new solutions. The fact that most suppliers are slow to appreciate and link up technology with their system of procurement also affects the success of the officers in introducing technology into the system. While some organizations understand the importance of IT in supply chain management, others lack quality master data and have difficulty in judging the potential and usefulness of new IT solutions. According to Autry, Grawe, Daugherty, & Richey (2010), lack of user-acceptance of such solutions causes failure in addressing the challenges and complexity involved in the procurement processes. Most procurement organizations often suffer the deficiency of qualified staff to undertake modern procurement systems, an aspect that has caused additional issues due to human error in IT projects.
Recommendations to Ensure Organizational Success
In order to resolve the technical issues evidenced in the procurement system, the officers in charge should engage in proactive practices including training and awareness on the importance of technology in procurement. Suppliers should be informed about the importance of using technology to minimize the risk of fraud and human error (Tukuta & Saruchera, 2015). Procurement technology is also essential in that it will reduce procurement issues and foster alignment of the activities such as to reduce complexity in the process. Training of employees is also pertinent to facilitating the appreciation of technology in the process to increase cooperation and ease of operation. This will help to eradicate the problem of limited staff experience. This will also solve the issues associated with analytics, inventory management, storage, and finances, among others.
In order to solve issues associated with integration, procurement organizations should consider the implementation of internal spreadsheets, Web sites, supplier Web sites, and the manufacturer’s Web site to gather the necessary information to solve the problem associated with insufficient master data (Saberi, Kouhizadeh, Sarkis, & Shen (2019). Integration is required to ensure that new tools have the ability to share information and data in a usable and accessible manner. The integration will ensure that systems work together efficiently by connecting different components of the procurement organization including auditing, contracting, sourcing, financing, and analytics.
Conclusion
Advancement of technology has caused purchasing and procurement organizations to evidence issues of staying updated, integration, lack of knowledge, and costly costs associated with upgrading the systems. Technological issues are often facilitated by additional costs, lack of master data, lack of cooperation between participants in the supply chain, and diminished knowledge, among the purchasers, manufacturers, and suppliers, among others. In order to resolve these issues, procurement organizations should invest in training, education, integration, and promotion of awareness on the importance of technology amongst the purchasers, suppliers, and manufacturers, amongst other participants.
References
Autry, C. W., Grawe, S. J., Daugherty, P. J., & Richey, R. G. (2010). The effects of technological turbulence and breadth on supply chain technology acceptance and adoption. Journal of Operations Management, 28(6), 522-536. https://doi.org/10.1016/j.jom.2010.03.001
Saberi, S., Kouhizadeh, M., Sarkis, J., & Shen, L. (2019). Blockchain technology and its relationships to sustainable supply chain management. International Journal of Production Research, 57(7), 2117-2135. https://doi.org/10.1080/00207543.2018.1533261
Subramanian, N., & Gunasekaran, A. (2015). Cleaner supply-chain management practices for twenty-first-century organizational competitiveness: Practice-performance framework and research propositions. International Journal of Production Economics, 164, 216-233. https://doi.org/10.1016/j.ijpe.2014.12.002
Tukuta, M., & Saruchera, F. (2015). Challenges facing procurement professionals in developing economies: Unlocking value through professional international purchasing. Journal of Transport and Supply Chain Management, 9(1), 1-9. doi:10.4102/jtscm.v9i1.152
Wang, Y., Han, J. H., & Beynon-Davies, P. (2019). Understanding blockchain technology for future supply chains: a systematic literature review and research agenda. Supply Chain Management: An International Journal. https://doi.org/10.1108/SCM-03-2018-0148