By LUAGHANO MIAMBATHERE exists a strong correlation between competitive advantage and procurement. This is especially true for many of the companies operating in the manufacturing industry. Notably, Michael Porter’s 1985 book, Competitive Advantage makes mention of how every value (processing) activity employs purchased inputs of some kind, ranging from raw materials used in production to professional services, office space and capital equipment. In essence, procurement practices often affect the quality and supply of purchased inputs and in the long run, production costs, inspection costs, and product quality.By definition, procurement is the process of acquiring suitable goods, works or services from a third-party vendor through a direct purchase, competitive bidding, or tendering process while ensuring timely delivery of the right quality and quantity. Local procurement, therefore, entails obtaining raw inputs, personnel, services, supplies, and equipment from local or indigenous sources. To begin with, procurement is a huge determinant of cost position. A well-defined procurement process can provide an organisation with […]
Creating competitive advantage through local procurement
