ISCOM/476 Signature Assignment: Purchasing and Logistics Integration (PLi) Benchmark

About Your Signature Assignment

This signature assignment is designed to align with specific program student learning outcomes in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.

Resource: "The Research: Linking Purchasing and Logistics Integration (PLi) to Improved Functional and Financial Performance", located in Achieving Supply Chain Integration, Ch. 5 (page 99).

Review the research tables and best practices.

Apply the four best practices to your industry, or one of your choice.

Write a 750 word summary suggesting improvements in financial and functional performance based on the four best practices.

Format your paper consistent with APA guidelines.

The Research: Linking Purchasing and Logistics Integration (PLi) to Improved Functional and Financial Performance

A survey was sent to purchasing and logistics managers from the University of Tennessee Global Supply Chain Institute and Forums mailing list, resulting in more than 180 responses from managers, ranging from CEOs and presidents to analysts. The respondent firms ranged in size from over $20 billion to under $100 million in revenue. The industries included the following:

· Aerospace/defense

· Apparel/textile

· Automotive

· Building materials

· Chemical, oil, and gas

· Commercial printing

· Components and systems

· Conglomerate

· Construction

· Consumer electronics

· Engineering

· Environmental services

· Facilities management services

· Financial institutions—banking

· Financial institutions—insurance

· Food, beverage, and nutrition

· Food service

· Government—national

· Government—local

· Health-care delivery services

· Heavy machinery

· High-tech network infrastructure

· Hotel/hospitality

· Household, personal care, and cosmetics

· Industrial equipment

· Media/entertainment

· Medical equipment

· Metals/glass processing

· Mining

· Office equipment

· Packaging

· Pharmaceuticals

· Plastics processing

· Professional/information services

· Pulp and paper

· Retail

· Telecommunications services

· Transportation services

· Utilities

· White goods

Respondents were first asked to identify whether they worked primarily in purchasing or in logistics. Purchasing was defined as including the following:

· Sourcing direct materials

· Procurement of maintenance, repair, and operating supplies

· Contracting services with outside suppliers

· Procurement of capital equipment/facilities

· Procurement of finished goods (completed items for resale)

· Supplier evaluation and selection

· Management of continuous supplier relations

· Supplier performance measurement

· Establishment of goods/services specifications

· Contract negotiations over materials supplies/services

· Global sourcing/sourcing strategy

Logistics was defined as including the following activities:

· Inbound/outbound transportation

· Owned fleet management

· Warehouse operations management

· Materials handling

· Packaging

· Order fulfillment

· Logistics information systems management

· Inventory management

· Management of third-party logistics services providers

· Customer service

· Reverse logistics flows

· Supply/demand planning

Next, the respondents were asked a series of questions related to their perspective on the nature and level of integration between their department and overall business strategy as well as between the purchasing and logistics functions. For example, if respondents indicated they were purchasing managers, they were asked about the purchasing group’s alignment with business strategy and the group’s relationship with the logistics group.

Major findings from the survey include the following:

· Purchasing and logistics frequently are found in a broader supply chain or operations organization but really exist as two separate and disconnected functions.

· Both purchasing and logistics are well aligned independently with their business unit’s strategy and activities but not nearly as well aligned with each other.

· Despite formal organizational links between purchasing and logistics, interaction between the functions is typically informal and unstructured.

· Maintaining open lines of communication is the most widely supported method of interaction between the functions.

More detail on these findings is provided in the tabular breakdowns that follow.

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