Integrating the Procurement Process by Mike Richardson – Article Example
Integrating the Procurement Process-Article Review al Affiliation Integrating the Procurement Process-Article Review Effective production and procurement is key to the success of any organization. Procurement, for instance, ensures continuous production of products without stoppages for lack of raw materials. This is because it ensures that the company maintains enough stock of raw materials all the time. This is particularly so in the aviation industry where procurement plays a key role in ensuring that there is clarity, understanding, and control of material purchasing environment. In the article, Integrating the procurement process, Mike Richardson explains how procurement plays a critical role in creating clarity, understanding, and control in purchasing of materials in the aviation industry (Richardson, 2013).
Richardson begins by pointing out that like many other industries, the aerospace industry is characterized by stiff competition with several airlines playing in the industry. He takes particular note of Boeing and Airbus, which have continuously been making headlines for the supremacy battles. The author observes that the closure of Boeing Dreamliner resulted in many questions being asked regarding the safety of the aircraft industry and problematic public relations. In addition, he pointed out that the challenges that Boeing faced by grounding its Dreamliner also brought the supply chain into sharp focus. As such, the author observed that the supply chain has been very crucial to Boeing in its attempts to increase efficiencies in the production and design of its airline. (Richardson, 2013).
According to Richardson, an effective procurement system requires empowering the supply chain system. Richardson observes that for a company to maintain a competitive edge in the present day business environment that is characterized by escalating cost of raw materials and declining profit margins, it must ensure that it empowers it has an effective procurement department to ensure efficient control of raw materials. Richardson argues that, just as aircraft designers, technicians, and engineers are careful in the manufacturing process, the same should also be encouraged in the procurement of materials by empowering the supply chain by looking for opportunities to improve operations, designs, as well as change behavior and processes (Richardson, 2013).
Richardson also pointed out that the diversity and complexities of components needed to produce and efficient and working airframe is huge across a similar supply chain. As such, effective procurement is necessary to be able to accomplish the needs of customers and the end-to-end supply chain, as well as bring the same level of structure, diligence, and rigor to the purchasing cycle as it applies to the manufacturing processes. As such, he concludes that procurement is very critical to the delivery of quality product to the manufacturing process (Richardson, 2013).
Richardson also claims that an effective procurement system requires taking the holistic view of the entire supply chain system. In this regard, the author observed that in order for the procurement to contribute to the future success of a business, and ensure the delivery of credible change; it must adopt a total supply chain management to ensure that the business is best positioned for improvement when the economic recovery begins. Richardson suggests that an effective procurement system must draw together and capture the entire supply chain system. In addition, the author noted that being able to know the commonalities of resources, practices and processes, procurement can help a company realizes efficiency opportunities that may have been left untapped (Richardson, 2013).
Effective material management is very critical to the success of any company. This is only achievable through effective procurement and supply chain management. As such, every company, especially those operating in the aviation industry must ensure effective management of materials by establishing and effective production and procurement system. Procuring materials effectively ensures that the company does not run short of materials that may result in the stoppage of operations.
Effective procurement of materials ensures that materials are obtained at low cost. This is important since it reduces the cost of production, which result in improved profits. Effective procurement system is also important in the aviation industry since it results in the acquisition of quality products. This is important since it leads in the production of quality products that satisfy the needs of customers. This became apparent at a time Boeing was in crisis that resulted in the grounding of its dreamliner. In this regard, as the company strived to achieve greater efficiency in production and design, effective procurement system was needed to ensure that the company achieved its objectives.
It has also become clear that the aviation components and composite materials continue to evolve. Therefore, companies operating in the aviation industry must strive to elevate themselves from a business function by introducing a professional serviced oriented thinking. In addition, aviation industries need to use procurement as a catalyst to innovation by integrating, nurturing, and promoting a collaborative approach that harnesses the power of the purchasing cycle. Further, the changes in the procurement paradigm require integrating the supply chain management under one banner, as well as having a better understanding of the total ownership cost capable of creating opportunity to take a new approach to the supply chain collaboration.
Richardson, M. (2013). Eurospace Manufacturing: Integrating the procurement process.. Retrieved from http://www.aero-mag.com/features/40/20137/2012/