Day 2

Session-1

Purchasing and its functions in business

Resource person:
Md. Tamzidul Islam
Assistant Professor, BRAC Business School
BRAC University, Bangladesh
E-mail: tamzidul@bracu.ac.bd

Functions of an OrganizationPorters Value Chain Model

Role of purchasing in Business

Purchasing as a function
Concept

Purchasing as a key element required for productive

work
-Factor of production
-Cost of production

Shrinking labor cost advantage

In 2003, Mexican workers made over twice what their Chinese counterparts did;
today that gap has narrowed to 1.15

times.
At the same time price of oil increased by 3.25 times

The future of supply chain

Key dept. responsible for outside manufacturing

Reading material: Materials cost as a percentage of sales income

Key objectives of business and operations

1.
2.
3.
4.

RIGHT QUALITY
RIGHT QUANTITY
RIGHT TIME
RIGHT MANUFACTURING COST

Goods and service continuum

How does manufacturing and service

organization differ?
Goods

Service

Degree of customer contact Low

High
Uniformity of input..
Labor content of jobs.Low

High

Uniformity of output..High
Measurement of productivity Easy
Production and delivery.Later

Low

Quality assurance..
High
Amount of inventory.
Much
Evaluation of work.
Easier
Ability to patent design.
Usually

Low
High
Difficult
POS
Low
Little
Difficult
Not usually

The End

Day 2
Session-2
Business and Purchasing environment

Resource person:
Md. Tamzidul Islam
Assistant Professor, BRAC Business School
BRAC University, Bangladesh
E-mail: tamzidul@bracu.ac.bd

The Organization and Its Environments

International
dimension

Technological
dimension
Competitors

Regulators

Politicallegal
dimension

Owners
Customers
Employees
Physical environment
Board of directors
Culture

Strategic
partners

Suppliers

Sociocultural
dimension

Internal environment

Copyright by
Task environment
Houghton
Mifflin
General
Company. All environment
rights
reserved.

External
environment

217

Economic
dimension

How Organizations and Environments Interact

Copyright by Houghton Mifflin

Company. All rights reserved.

Task: Can you identify and relate with on how these

environmental factors influences purchasing decisions

Porters Five forces model

Can you identify few factor that will determine suppliers power over organization?

Basic Supply Chain environment

Suppliers suppliers
suppliers to
to customers
customers customers
customers
Suppliers
Customer

Customer

Customer

Customer

Supplier

Supplier

Customer

Service
Provider

Firm

Supplier

Supplier

Supplier

Supplier

Customer

Supplier

Supplier

Supplier

Customer

2nd-Tier

Customer

Service
Provider

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

P
h
y
s
i
c
a
l

I
f 1st-Tier
o
r
m Focal
Firm
a
t
i 1st-Tier
o
G
n 2nd-Tier o
o
3rd-Tier d
s

What is Supply Chain Management?

Upstream
4th Tier 3rd Tier

2nd Tier

Sand/Rock
Quarry

Cement
Contractor

Lumber
Provider

Framing
Contractor

Mill

Focal Firm
1st Tier

1st Tier

Temporar
y Labor
General
Contractor

Downstream

Hotel
Brand
Hotel
Management
Company

Mattress
Supplier

Hotel
Brand
Hotel
Brand

2nd Tier

3rd Tier

Business
Traveler
Leisure
Traveler

Food
Services

Oil
Company

Forest

Chemical
Processor

Polyethylene
Bag
Manufacturer

Farmer

Flour
Processor

Lumber
Provider

Corrugated
Manufacturer

Cereal
Manufacturer

Grocery
Distributor

Retail
Grocer

Consumer

The End