Group Members

• Zulaid javed
• Talha Naeem
• Aamir Chandio
• Abdullah Azam
 HISTORY OF ZONES PRODUCTS THEY DEAL IN ORGANIZATION STRUCTURE

Recap

UMBRELLA OF HOW PURCHASING PROCESS FLOW

PROCUREMENT DEPARTMENT WORKS &
WHAT ARE THEIR
RESPONSIBILITIES
 Supplier
Evaluation and
Selection Process:
 During new product development

Due to poor internal or external supplier performance

When Do At the end of a contract

Supplier When buying new equipment

Evaluation When expanding into new markets or product lines

and Selection When internal users submit requisitions for goods or services

Decisions When performing market tests

Arise? When faced with countertrade requirements

When current suppliers have insufficient capacity

When reducing the size of the supply base

 High capability of current suppliers + High
strategic importance of requirement is equal
to Minor to moderate information search

High capability of current suppliers + Low

Identify strategic importance of requirement Is equal
to Minor information search
Potential
Supply Low capability of current suppliers + High
strategic importance of requirement is equal
Sources to Major information search.

Low capability of current suppliers + Low

strategic importance of requirement is equal
to Minor to moderate information search.
 In Zones, major source of information is current or existing
suppliers. Buyers often look to existing suppliers to satisfy
a new purchase requirement.

The advantage of this approach is that the purchaser does

not have to add and maintain an additional supplier. Also,
Current the buyer can do business with an already familiar
supplier, which may limit the time and resources required
Suppliers to evaluate a new supplier’s capabilities.

On the negative side, using existing suppliers, although

perhaps easier and quicker, may not always be the best
long-term approach.
 • In Zones we maintain databases of
suppliers that can support an industry
Information Databases: or product line., for example, we
maintain data on about 30,000
companies serving the computer
industry.
 • It is an unofficial market in goods that
have not been obtained from an official
supplier.
Gray Market: • When the product is EOL, discontinued
or refurbished we may go to Gray
Market to buy products.
 • Do not rely on only one supplier
• Make sure you and the supplier are moving down the
same road
• Build your portfolio with the best. Choose suppliers that
add strength to your ability to add value to your end
Key Points kept in customer.
mind while • Be a big fish in a little pond. Sourcing from the biggest
supplier might bring a good purchase price but limits
choosing vendor: your ability to leverage. A smaller supplier may be more
motivated to innovate in your direction.
• Know the supplier’s Internet strategy. Understand how
your suppliers are using the Internet to add value to
what they develop, manufacture, service, or distribute.
 • In zones we have 3 major distributors with whom we do
our 75-80% business.

Sourcing
• Ingram
Alternatives
• Tech Data
Manufacturer vs. • Synnex
Distributor:
• These three distributors are listed in Fortune 500 and
they work with us to provide complete IT solutions
 • They provide 1- or 2-day delivery all over US depending
upon customer requirement.
• Preferred Partners

• For strategical procurement, the sourcing team usually

Disti Vendors works with buyers as they have better relationship with
vendors.
 Suppliers 35%
capabilities
Rating of
your Financial Position 25%
suppliers: Competitiveness 20%

Supplier reputation 15%

Access to Supplier 05%

CPM MATRIX

Factor Weightage Supplier 1 Supplier 2 Supplier 3

Supplier Capabilities 35% 5 1.75 4 1.4 3
Financial Positions 25% 4 1 3 0.75 2
Competitiveness 20% 4 0.8 3 0.6 3
Supplier Reputation 15% 3 0.45 4 0.6 2
Access to Supplier 5% 4 0.2 4 0.2 4
Total 100% 4.2 3.55 2.65
 • The final score would be placed on the
scale which is based on below points.
• Least favorable
• Below average
• Average
Rating Criteria:
• Above Average
• Most favorable
• So, the vendor with the highest score
would be selected as it will be above
average.
 • In Zones, Hybrid system is used in which decentralized
approach is used when there is unique requirement and
centralized approach is used when strategical decisions
Centralized organization structure is used which makes
policies regarding purchasing and other tactical
decisions

Organizational Whereas, when regular buying is done the best suitable

Structure structure is decentralized. When its not a high dollar PO
the buyer makes the decisions at the spot. The higher
management usually defines the SOPs of purchasing which
is implemented all over the purchasing department. The
organizational structure is centralized so that higher
management is aware what’s happening and where the
department is lacking its capabilities.
Recommendations:

• Zones has recently changed the credit terms with there vendors from 30 days to 45
days due which the POs are being rejected recently. We would suggest that such
major changes should be done by discussing with vendors first it makes waste of
resources and time.
• The ERP has still some limitations due to which some delays happens. The real time
information is incorrect due to which POs get rejected and which is also a waste of
resource. We would suggest Zones to use SAP which is much easier to use and
more efficient.
• We had a major breakdown in our servers recently due to which lot of time was
wasted. There should be a proper backup so that this won’t happen in future.
• Delays in orders are the reason for losing business. Special consultancy should be
sought to retain customers.
• Meetings should be done more often.