Abstract
M.Com. (Business Management)
The value that Procurement adds to the supply chain of a business organisation is frequently underestimated. Procurement is regularly not receiving the acknowledgement and recognition it is due for the contribution it delivers through strategic sourcing. It is commonly labelled as a function that is mainly concerned with reducing the cost of products and services.
The purpose of this study was to explore the supply chain value-adding contributions made by Procurement in the sourcing of logistics services for a business organisation. More specifically, the research follows a case study design as it investigated the value-adding contributions of Procurement to a supply chain of a multinational company operating in the Fast Moving Consumer Goods (FMCG) industry.
This is a qualitative study, which focuses on a descriptive case study. Internal stakeholders of the focal organisation’s supply chain were interviewed to determine the value-adding contributions made by Procurement. Secondary data and literature was consulted to triangulate the findings of the interviews.
The findings of the analysis revealed that Procurement does not only reduce costs for the business, it has more value-adding contributions. It delivers value to the supply chain members in the form of best value for goods and services, business understanding and innovation and achieving customer satisfaction. In addition, Procurement delivers against its set deliverables and drives sustainable supplier relationships for the internal stakeholders of a typical FMCG company. Procurement has more to offer than the general perception held within the industry.