Supply chain management has established that procurement and adding purchasing practices within its purview is effective to run a business smoothly. It helps in keeping operational costs down and can be strategic for a business to be able to optimally utilize its resources.
Within the Marine Offshore and Shipbuilding industry, procurement costs can be huge owning to the size of the business itself. Even slight changes can show a significant difference in the operating costs. I shall discuss the specific types of procurements, the principles and methods of creating a supply chain excellence in this industry.
Direct Procurement and Industry Challenges
Companies that buy goods for resale are those that indulge in direct procurement. The purchased goods are processed, packed or branded to be sold further (Cook, 2014). This is called direct procurement. It works best for industries such as bakeries, pharmaceuticals, food items, clothes manufacturing where the raw materials are processed to various degrees and sold in the market.