Master of Business Administration Executive
Faculty / School
Faculty of Business Administration (FBA)
Year of Award
MBA Executive Research Project
Shells procurement strategy involves buying goods and services at the right price at the right time at the right place at the right quantity and of the right quality.
In Contracting and Procurement, the time to market (which means how quickly a certain good or service can be sourced/procured) is an essential factor in the end to end purchasing/contracting lifecycle. Too often companies rely on their existing pool of suppliers when goods and services are required to be procured and in some cases this is a quick and easy solution to meet the company's needs, however this should not become a regular practice. If it does the following two scenarios can take place both of which can be detrimental to the value chain for procurement:
Since exploring the market and searching and assessing new potential suppliers is a time consuming activity, not enough time is spent in evaluating the market place and searching for the right suppliers with the right skill set and capabilities. This results in renewals/extension of existing contracts without re-assessing the market place which can mean:
a) Lower of quality of goods/services received since the marketplace might have evolved and new and technologically more competent and efficient suppliers/vendors might not be considered ; and/or
b) Higher price paid for a particular good or service as a result of not re-assessing the market place and re-tendering/re-negotiating.
Alternately, too much time is spent in assessing the market place and evaluating vendors each time there is a buying/ contracting requirement. This can cause delays in project deadlines which can have drastic consequences for the company and for the procurement function.
Moeed, A. (2013). Financial and commercial viability of Shells procurement strategy and its credit settlement mechanism : (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-emba/462
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