Procurement Domestically and Internationally : The Case of Companies A and B
Zhang, Xiaoying (2012)
Zhang, Xiaoying
Tampereen ammattikorkeakoulu
2012
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201205229263
https://urn.fi/URN:NBN:fi:amk-201205229263
Tiivistelmä
This thesis aims to compare domestic and international procurement operations & business systems in company A and B. Company A is a multinational overseas company with domestic procurement and sales in China. Company B is a Finnish company with international procurement from Far East and sales in Nordic countries.
Procurement is directly linked to business or organizations’ ability to deliver value in the market place. It is increasingly recognized by managers as a key business driver. Procurement decisions fundamentally affect business success because costs on purchased parts and services represent more than half of the sales revenues of most companies today. Companies having contacts of globally distributed supply base, are not necessarily limited to domestic purchase, moreover they can purchase internationally.
Conducting and managing international procurement is more complex than undertaking domestic procurement. Some key aspects that differentiate international procurement from domestic procurement are that international procurement deals with a wider range of issues: trade between different nationalities, less mobility of factors of production, customer heterogeneity across markets and use of different currencies, governmental economic policy and political issues, culture, distance, customs and tax systems.
This case study with a practical approach intends to create a holistic picture of domestic procurement in company A and international procurement in company B. By comparing their procurement operations and business systems, I conclude that company A had more advantages in choosing suppliers, better payment terms than company B, while company B has the advantages of the whole procurement department staff working as a team and the procedure is simpler. Lastly, the author had generated some suggestions which may benefit the procurement operations of company B.
The author obtained firsthand procurement operations knowledge of both companies because of her seven years work in company A and three months practical training in company B. This thesis contains some confidential information (business systems) that does not appear on the published version.
Procurement is directly linked to business or organizations’ ability to deliver value in the market place. It is increasingly recognized by managers as a key business driver. Procurement decisions fundamentally affect business success because costs on purchased parts and services represent more than half of the sales revenues of most companies today. Companies having contacts of globally distributed supply base, are not necessarily limited to domestic purchase, moreover they can purchase internationally.
Conducting and managing international procurement is more complex than undertaking domestic procurement. Some key aspects that differentiate international procurement from domestic procurement are that international procurement deals with a wider range of issues: trade between different nationalities, less mobility of factors of production, customer heterogeneity across markets and use of different currencies, governmental economic policy and political issues, culture, distance, customs and tax systems.
This case study with a practical approach intends to create a holistic picture of domestic procurement in company A and international procurement in company B. By comparing their procurement operations and business systems, I conclude that company A had more advantages in choosing suppliers, better payment terms than company B, while company B has the advantages of the whole procurement department staff working as a team and the procedure is simpler. Lastly, the author had generated some suggestions which may benefit the procurement operations of company B.
The author obtained firsthand procurement operations knowledge of both companies because of her seven years work in company A and three months practical training in company B. This thesis contains some confidential information (business systems) that does not appear on the published version.