Essay Example on Global Economy & Procurement: The Pivotal Role of Supply Chain

The learning objective is to explain the pivotal role played by procurement on the supply chain in the global economy. The article illustrates the role played by the supply chain in the economy and its implication in global economic growth. The article narrates the role that supply chain plays in the worldwide economy, all the way from sourcing raw materials to distributing manufactured products to the final consumers. The primary significance of procurement affects the entire supply chain resilience in a firm. It is through procurement that industries realize cost-cutting and valid savings on materials that are acquired through competitive pricing.

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The supply chain is very fundamental in today's business world and is impacted by both the internal and external business elements. The role played by procurement is embedded in its contributions to the development of supply chain resilience. Procurement aims to acquire the right goods and materials for firms at the best prices at the right time (Pereira et al., 2014). Gravier (2019), argues that it is the global supply chain practices that still hold down inflation rates worldwide. He attributes this to the ability of a new supply chain to find modern and cheaper production techniques in the economy through the power of competition and managerial inventions.

The article argues that procurement is the accelerator of the supply chain. It is through an efficient procurement process that a business ensures the fulfillment of its supply chain objectives. It is through procurement that firms do the coordination of sourcing for materials used in production. When the materials are turned into consumable goods, the supply chain is still in progress until the products reach the final consumers. This implies that the supply chain in all business enterprises begins with procurement.

When shopping with Ali Baba, I had the opportunity to interact with the supplier on a chat application and asked for a discount on goods before they were delivered. The company has developed infrastructure, such that it relies on third-party logistics to supply products to its customers. The company stays ahead of its competitors through such managerial innovations of ensuring that its supply chain works all the way efficiently to the last customer and at the same time cutting costs. The company uses technology to invite vendors to take part in its market campaigns.

References

Gravier, M. I. (2019, August 2). Supply Chain Management Has Changed the World Economy. Supply chain management has changed the world economy. (2019, August 2). Supply Chain Management Review. https://www.scmr.com/article/supply_chain_management_has_changed_the_world_economy

Pereira, C. R., Christopher, M., & Da Silva, A. L. (2014). Achieving supply chain resilience: the role of procurement. Supply Chain Management: An International Journal, 19(5/6), 626-642. https://doi.org/10.1108/SCM-09-2013-0346