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CHAPTER 1
PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT
1.6.2 TACTICAL PROCUREMENT MANAGEMENT
This second level of management is executed at middle-management level.
Procurement planning and management is medium-term and includes the
implementation of the procurement organisation that the strategic management
has decided upon.
The objectives of tactical procurement are to conduct on-going logistical
analyses, including trade-off analysis, to ensure that the most cost-effective
levels of inventory are maintained. The objective is also to ensure the sufficient
and timeous flow of procured items to support the operations while avoiding
excessive inventory volumes that tie up capital that could be invested productively
in alternative opportunities. Other objectives include conducting research about
new products, materials development and technological innovations; studying
various inventory control systems available in the market and implementing
the most appropriate one for the business; and studying the most appropriate
materials flow systems and implementing the best one.
Additional objectives involve receiving and processing intra-organisational
requisitions and bills of materials to ensure continuation of the business
operations while advising top management, in conjunction with the finance
entity, on entering into contracts with the chosen suppliers. Tactical procurement
personnel may also be actively involved with developing new and current
suppliers [20].
1.6.3 OPERATIONAL PROCUREMENT MANAGEMENT
This is a lower level of management and comprises short-term planning and
the execution, monitoring and control of procurement operations. Activities
performed at this level are guided by middle management. The objectives at
this level are to:
• Conduct inventory analysis and stock-taking.
• Reduce inventories through scheduling.
• Maintain and improve relationships with suppliers.
• Assist suppliers by supplying technical and administrative support.
• Timeously share operations schedules with suppliers.
• Pay supplier invoices on time.
• Adhere to suppliers’ contract clauses.
• Co-ordinate incoming traffic with a view to receiving procured inputs on time
and returning goods that do not meet requirements [20].
Operational procurement management is concerned with the day-to-day
operations associated with procurement. These individuals are responsible for
ensuring that the right quality and right quantities of products are delivered at
the right time and right place.