Procurement And Supply Chain Management in Sunderland City Council Project Case Study

Introduction: Effective Procurement And Supply Chain Management Techniques for Construction Projects

Supply chain management is a type of Concept which includes managing the flow of goods and services from and to the company. These goods flow from the supplier to the company and from the company to the consumer. Thus, it is very necessary for the company to effectively manage the supplier change so that on-time production can be implemented and as a result, sales will increase. The current studies are based on the Sunderland City Council which is planning to build 1000 homes for rent by purposeful stop this is a part of Riverside Sunderland City Council master plan and as a result of this, the proposed project is unique and provides a carbon neutral communities for improving the landscape of the environment. The current study will outline the whole road map of the Government and supply chain for the completion of the current project. In addition to this, it will also assist in the effective procurement of the materials and implementation for the success of the project. In the end, it will outline the socially responsible procurement consideration and how it creates a positive impact on the success of the project.

Main Body

Detailed Procurement And Supply Chain Roadmap

Procurement is defined as the action through which the company tries to procure or obtain anything. For the successful working of the company, the appropriate procurement must be managed. This is because of the reason that when the procurement is good then the construction materials will be made timely available. Thus, as a result of this, the overall efficiency of the company and the construction of the new houses will be improved well. Thus, to make the construction effective and successful it is the responsibility of the procurement manager that they effectively try to manage the resources and procure them most ethically and effectively (Lysons and Farrington, 2020). Thus, preparing an appropriate road map for the supply chain and procurement is very necessary to become successful. The reason underlying the fact is that when the planning about the procurement and supply chain is made then automatically it will guide the effective working of the supply chain and all the material will be provided timely. Hence, for deciding the supply chain and its road map the most appropriate data and latest technology must be used for the successful management of the supply chain.

Identification Of Client And Stakeholder Need

For the effective making of the supply chain, it is the responsibility of the company or the council they effectively identify the client and the various stakeholders of the project. The reason underlying the fact is that when the stakeholders and client are known then it will assist the company in analysing the type of material needed to be brought within the working of the company (Siawsh and et.al, 2021). This is crucial for the reason that when an effective list of clients and stakeholders is prepared it is easier for the council to make the strategies for the effective procurement and the supply chain. For the success of the company it is very necessary that the appropriate stakeholders and client are identified. The reason underlying the fact is that the client and the stakeholders are the people who are interested in the success of the company and the project. In the current case of Sunderland City Council the different stakeholders are follows-

Project manager is the first stakeholder who is very necessary to be kept satisfied. These are the people who actually decide the whole plan of action. In case the project manager is not happy and satisfied with the working then it will be affecting the whole project and its completion. In the present case of procurement and supply chain management it is very necessary that the project manager decides the supply chain effectively. In case the supply chain will not be effectively decided then it will be affecting the overall working efficiency of the project and its completion.

Project team is another set of stakeholder which needs to be kept happy and satisfied. The reason behind the fact is that project team is the one who actually works and it is very necessary that they are kept satisfied. This is pertaining to the fact that when the employees will be happy then automatically they will work efficiently and as a result of this the overall working capability and objectives of project will be attained. Within the supply chain management and procurement, employee plays of crucial role as they actually work in direction of procuring the raw material and start the construction of the houses for council.

Suitable procurement arrangement

For the success of the project it is very necessary that effective procurement strategies and supply chain is used. The reason underlying of fact is that when the appropriate method for procurement will be used then it will be resulting in overall development of the plan and the construction of the house will take place effectively (Harland and et.al, 2021). Thus, there are different kinds of methods through which the reliable vendor can be contacted and procurement can be made with them. The most suitable method for the City Council for procurement of the material includes the use of two stage tendering. This is a procurement strategy which is helpful for the company in analysing the different options for procurement and selecting the best suitable option. Within this method the first stage includes getting the tender information from all the bidders without the price quotation. There after the next stage is of getting the tenders who have price specifications for the selected bidders only. Within the first stage the bidders who are not appropriate are discarded and are not taken to the second stage (6 popular procurement methods & tips to choose suppliers, 2023). The current method of procurement will be helpful to the city council in evaluating the different vendors providing the material under trying to communicate with them. The use of two stage tendering method will be the most appropriate because it includes the analysis of different vendors and selecting the most appropriate vendor. Thus, when the appropriate vendor will be selected then automatically the material will be procured in proper and effective manner. Hence, as a result of this the overall construction will take place effectively and the objectives will be attained by the Council.

Other project participant

For the effective management of the supply chain it is very necessary that all the project participants and specialist are working effectively and according to their role. The process of supply chain is very lengthy and it is very crucial that all the participants involved within the process are working ethically. The most common participants which need to be present within the supply chain of the City Council include the producer, distributor, wholesaler, retailers and the final customers. This is the standard participants of the supply chain which needs to be present in case of the city council. In case it is not present effectively then it will be impacting the overall working. Thus it is the duty of the project manager of the City Council that they effectively manage these entire participant within the process so that the overall supply chain can be managed.

Role of different participant

• Producer- The role of the producer is the most important within the supply chain management. It is because of the reason that produces are the people who actually reduce the material. In case the material will not be produced than it will not be provided to the company for further working (Boruchowitch and Fritz, 2022). Hence, it is the responsibility of the producer that the effectively produced the goods and services so that it can be used as the raw material for the other companies.
• Distributor- The distributor is another participant within the supply chain who works for providing the material to the user. Distributor is the people who provide the raw material and the products from the producer to another participant within the supply chain. This could be either wholesaler or the retailer (Okeagu and et.al 2021). According to the supply chain of the City Council it includes providing the material to the wholesaler.
• Wholesaler- It is another participant within the process of supply chain management. With regards to City Council the wholesaler are the people who provide the quantity of material in bulk. These are the people who provide the bulk quantity and against it they are provided with some discount for purchasing in bulk. Hence, it is beneficial for City Council that they effectively buy the goods from the wholesaler so that they can avail the benefit of large quantity discounts.
• Retailers- The retailer is the participant who provides the material but at slightly higher prices compared to the wholesaler. This is particularly because of the reason that the retailer does not provide the material in bulk and as a result of this the discount is not provided so the prices are high. In case City Council is having some material which is not available with the wholesale or then they have to buy it from the retailers.
• Consumers- Lastly the consumer is the end of the supply chain and it is very necessary that the material is provided to the consumer. The reason underlying the fact is that the supply is directed in order to cater to the need of the consumer. Thus, when the finished goods are provided to the customers then only the supply chain ends. In the present case the supply chain will end only when the houses of built and provided to the users.

Standard form of contract

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For the effective procurement and supply chain it is very necessary that the standard form of contract is followed. This standard form of contract includes the use of written contract between the supplier and the company. In the present case the supplier will be sent a copy of the contract and it will be signed by them and will be kept safe by both the parties (Letunovska and et.al, 2023). This contract will include all the terms and conditions relating to the contractor and which need to be followed by both the parties. In addition to this soft copy will be email to both the parties and it can be used for the future reference as well.

Suitable tendering method

With the evaluation of the different tendering methods it is evident that most economical method is the two stage tendering method. This is a particular method which includes two different stages where in within the first stage only the details of the producers or the people having a material are provided without the price detail (6 popular procurement methods & tips to choose suppliers, 2023). The people who passed the first stage go to the second and there they have to provide the price quotation of the materials which they will be providing. It is very necessary for the City Council that they effectively comply with the two stage tendering process as it is much advantageous. The reason underneath the fact is that the major advantage includes effective evaluation of the different bidders. With help of the two stages the evaluation of the bidders is done in more appropriate manner and it provides the best vendor for gathering the material.

Pricing form and determination

With the appropriate selection of the better it is also very necessary that the appropriate pricing mechanism is also followed. The price is the most important element which needs to be effectively followed by the City Council. In case the tender will be highly priced then it will not be economical for the company in constructing the houses. Thus, the prices that must be effective so that the overall working and construction work can be done in better manner. For this the focus on competitive pricing strategy will be made for deciding the contractual price. The reason behind the fact is that the evaluation of prices of different competitors will be done and then the best suited will be selected. This after receiving the tender at the second stage all the tenders will be compared with one another and the tender having the lowest cost and maximum benefits will be used.

Procurement Technology And Digitalisation

In the current competitive environment, the use of technology is enhancing and it is being implemented in every stream of business. Within procurement, technology plays a crucial role as it assists in managing the supply chain effectively. The use of Technology has enhanced the supply chain and as a result of this, the overall working efficiency of the company has improved. In improving the procurement process and the communication between the suppliers and the vendors (Hallikas, Immonen and Brax, 2021). Moreover, the use of technology is economical and has reduced the time of the company effectively. Within the case of the Sundarland City Council, the use of Technology has been implemented effectively within the project of developing 1000 homes. Thus, the use of various technology is implemented and resultantly the working is improving. The two major procurement technology and digitalisation trends which are being followed to develop the Sundarland City Council include the following-

The first and foremost Technology which is implemented within the procurement includes the use of a blockchain. In general, blockchain is referred to as the cryptocurrencies or the distributed ledger Technology (Rasugu 2021). But this also assists in managing the procurement and supply chain is well. The reason underlines the fact is that blockchain assists in creating records of transactions which is used to track the goods. The effective use of blockchain helps the Sundarland City Council in managing the procurement process effectively. In addition to this, the blockchain also assists the company in establishing good trust with the supplier information and as a result of this, the overall working is improved. The reason behind the fact is that when trust is present 10 automatically it increases the working relationship between the company and the vendors and suppliers. Thus, the use of blockchain facilitates the Sunderland City Council in facilitating the track and trace application and as a result of this, the goods within the procurement and transit can be effectively tracked. In addition to this, it also assists in preventing the leakage of products and assists in identifying the roads which are damaged.

In addition to the blockchain use of artificial intelligence machine learning and analytics is another technological advancement which needs to be implemented to make the procurement effective. For managing the procurement and supply chain the use of artificial intelligence must be implemented. The reason behind this factor is that the current use of artificial intelligence machine learning is very popular and in case it is not implemented then the work will not be effective. Hence for the Sundarland City Council, IT is very necessary that they effectively comply with machine learning artificial intelligence to improve the procurement and supply chain. With help of the artificial intelligence the supply chain can be improved and it will assist in managing the Global supply network effectively (Jahani and et.al, 2021). The use of AI and machine learning will help the Sundarland City Council in managing the procurement and supply chain by predicting future demand and work. Machine learning will help the company in estimating the requirements and orders relating to the procurement and supply chain. This is when the timely orders will be provided to the vendors then automatically the delivery will take place on time. As a result of this procurement and supply chain will be managed effectively and production will take place on time. Moreover when the production takes place on time then automatically the houses will be provided for rent and cell on time. Thus as a result of this, the overall working capability of the Sundarland City Council will improve and as a result of this, the efficiency will be enhanced.

Thus, with this, it is clear that the use of technology is very beneficial because it makes work easier and simpler. Hence, in the conducting of the project based on Sundarland City Council, the effective focus on digitalisation is very essential (Bajomo, Ogbeyemi and Zhang, 2022). The use of digital technology is very assistive in managing the procurement process and as a result of this, the whole supply chain will be managed effectively. Thus, compliance with blockchain and AI is helpful to the City Council in managing the work in a better manner. With the help of effective technology, the project of making the 1000 homes will be carried on effectively. This is very assistive to the companies working in making the houses as this will help the business in managing the working effectively. Also, when the supply chain is effective then automatically it will result in on-time delivery of the goods and materials needed to construct the houses. With this on-time delivery of the material, the work will take place on time and resultantly the objectives will be attained well.

For the successful working of the council and its project of building 1000 homes within the place it is very necessary that effective compliance with the technology is made. The reason underlying the fact is that there are different types of technology and it is very essential for the company they follow the same. The reason behind this fact is that when the technology will not be followed then it will improve the overall working and as a result of this the objectives will be attained well. Moreover, it is also necessary for the council they continuously research the market so that overall technological advancement can be implemented within the company. This is very essential for the company as there are many different types of changes taking place within the external environment and all this need to be implemented within the working of the council as well. When these latest technology will not be used by the company then it can affect the construction process to a great extent.

Socially Responsible Procurement Consideration

While gathering the goods and materials for working it is very necessary that social responsibility is also managed. The reason underlying the fact is that when effective, working will be done then automatically it will result in protecting the environment within which the work will be managed. Along with this, it is the responsibility of the company they conduct socially responsible procurement so that the surroundings and environment can also be protected. This socially responsible procurement includes focusing on the transparency, social and business areas and working ethically (Buzzetto, Bauli and Carvalho, 2020). For the successful accomplishment of the project and its objectives, all the procurements must be made in a socially responsible manner. There are two major socially responsible elements to be considered while procurement and supply chain management for Sunderland City Council include the following-

Environmental Sustainability

It is referred to as the ability of the company to maintain the ecological balance of the environment and try to protect the natural resources as well. The reason behind this fact is that when effective working is managed then automatically it increases the working efficiency of the company and as a result of this the overall environment is protected. The focus on environmental sustainability is assistive for the company in improving the use of limited resources and supporting the well-being of the current and future generations of the company. For successful working it is very essential for the City Council that they effectively make use of the resources and try to protect the environment so that the working can be improved. Furthermore, when the effective focus is laid on the protection of the environment then it will improve the overall efficiency of the business and as a result, the whole environment will be protected.

For the successful working of the company, the environment must be protected effectively. The reason behind the fact is that when the company takes the material from the environment then it is their responsibility that they protect the environment as well. The focus on environmental sustainability will be assisting the City Council in meeting the current requirements without compromising the requirements of the future generation to meet their own needs. Thus, it is very essential for the company and the City Council that they must effectively try to protect the environment so that consumers are happy with their work (Attaran 2020). Along with this when the Council focuses on the protection of the environment then it will be improving the overall working and the interest of the consumers will increase. When the council includes environment-protected and friendly products within the construction of the houses then it will develop the interest of the consumers towards the working of the company.

Ethical Sourcing

It is defined as the ethical way through which the goods and services pass through every point of the supply chain of the company. This is very essential for the company they must implement the work ethically so that the overall working of the supply chain can be improved well. When ethical sourcing is implemented then it ensures that the material is brought correctly and appropriately (Utama and et.al, 2022). To accomplish the working effectively it is very necessary for the company that the material is brought in the correct manner and without any issue. In the present case of the City Council, the construction of 1000 houses is planned. Thus, for the objectives to be attained all the materials and resources must be arranged properly and effectively. When the material is used ethically then it will improve the working capability of the council. In case the material used by the council is not undertaken ethically then it will affect the efficiency of working and the consumers will not like the house.

The reason underlying the fact is that when the material used by the company is good and effective then ultimately it will increase the overall efficiency of the company. It is because of the reason that within ethical sourcing it is the responsibility of the company that they ensure that appropriate supplier is used. The reason behind this is that when the supplier will not be working ethically then it can also impact the consultation process. Thus, it is the prime responsibility of the city council to appropriately select the suppliers. When the supplier will not be working ethically then it might result in not providing good quality materials to the council. Ultimately it will affect the quality of the construction as the material used is not effective. Moreover, it is the responsibility of the council that they must effectively try to conduct ethical sourcing so that the overall work can be improved. Moreover, when ethical sourcing is focused, it will enhance the working capability of the council and effective working will be managed.

In the end, it is analysed that socially responsible procurement will surely help the stakeholders of the project to effectively manage the work. Thus, it is the responsibility of the stakeholders that they must ensure that ethical and socially responsible (Jin, 2021). The reason behind this fact is that when the stakeholders of the council will not be working ethically then it will affect the efficiency of the business to a great extent. All the stakeholders of the business need to consider these socially responsible procurement works so that the work can be done ethically and most appropriately.

Conclusion

In the end it is concluded that having good procurement and supply chain management is very necessary for the success of the company. The supply chain management includes bringing the raw material to the place of production and providing the final products to the customers. For the success of the company it is very necessary that the appropriate supply chain is followed. The above study highlighted that the current project deals with construction of 1000 houses for the people for rent and buy. The above study highlighted that different stakeholders are included within the project which includes project management, project team and others. In addition to this different participants were highlighted which included producer, wholesaler, retailer and many other. It was also evaluated that two stage tendering method is good for getting the tenders and competitive pricing strategy is better for agreeing the terms of the contract. Moreover it was also evaluated that the use of technology is helpful and it includes the use of blockchain and AI within the supply chain. In the end it was evaluated that focusing on environmental sustainability and ethical sourcing is necessary for making the procurement socially responsible.

References

Books and Journals

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Online

• 6 popular procurement methods & tips to choose suppliers. 2023. Online. Available through: < https://www.spendesk.com/en-eu/blog/procurement-methods/ >