NATIONAL INSTITUTE OF TRANSPORT

DEPARTMENT OF BUSINESS AND ENTERPRENUERSHIP STUDIES

HIGHER DIPLOMA IN PROCUREMENT AND LOGISTICS MANAGEMENT
MODULE NAME : PROCUREMENT AND SUPPLY AUDIT

MODULE CODE : BPU 07416

LECTURER NAME : MR. DAVID NJOVU

TASK : GROUP ASSIGNMENT

PARTICIPANTS : GROUP 3

NAMES REGISTRATION NO:

KAPAMA, Emmanuel NIT/BPLM/2016/799
MASANJA, Winifrida NIT/BPLM/2016/814
AMONI, Magdalena NIT/BPLM/2016/648
KASHATO, Belina F. NIT/BPLM/2016/644
MKUDE, Elizabeth A. NIT/BPLM/2016/739
KUDRA, Frank M. NIT/BPLM/2016/741
LEMA, Elia J. NIT/BPLM/2016/596
CHIBAGO, Alfred Y. NIT/BPLM/2016/720
SAIDI, Hamza M. NIT/BPLM/2016/805
Question
Internal supply chain control is a tool which is established by management of an organization to
help the same in running its daily operations. However, there are weaknesses which make the
control less effective. Among them are those caused by human beings; and others caused by
technology. Discuss how you would counter these weaknesses so that the controls can be more
effective and in diverse situations. Illustration with examples is highly recommended.
1.1 Introduction to Internal Supply Chain Control
Every organization needs to procure, store, and distribute goods, materials (products), and
services to support its activities. In addition, organizations must manage and monitor the
products as they move into and out of the store or warehouse. The components of Internal
Supply Chain such as procurement, transport, warehousing, and inventory management are
important business processes that allow an organization to obtain optimal value for resources
expended on goods and services. Efficient and effective Internal Supply Chain processes reflect
professionalism, compliance, fairness, reliability, and transparency to the organization’s
constituencies (members, donors, recipients, local authorities, and the general public). Therefore,
SCM requires considerable attention. (Agarwal, 2003)
1.1.1 Definition of Key Terms
Supply Chain
Krajewski et al. (2010) take a wider view and define supply chain as “the interrelated series of
processes within a firm and across different firms that produces a service or product to the
satisfaction of customers” and specify the definition even further to be “a network of service,
material, monetary, and information flows that link a firm’s customer relationship, order
fulfillment, and supplier relationship processes to those of its suppliers and customers”
Internal Supply Chain
Internal supply chain refers to the chain of activities or functions within a company those results
in providing a product to the customer. Integration of these functions involves the holistic
performance of activities across departmental boundaries. Basnet (2013)
1.2 Weaknesses of Internal Supply Chain Control
Although the internal supply chain, is important we must now analyze the weaknesses that are
experienced in this particular area. The following examples will emphasize the magnitude that
failure in the internal supply chain control can have upon the success of a company and its
consumers, and how threats can create strength within this area.
1.2.1 Weakness caused by Human Beings
According to Storey et al, (2006,) has identified three core enablers and inhibitators for
supplychain control in their study: transparency of information and knowledge; supply chain
behaviour; and performance measurement. For example, they found that even with existing
collaborative planning, forecasting and replenishment practices there were vulnerability to
erosion, revision and withdrawal from the agreed arrangements.
1.2.2 Weakness on Change of Technology
Another potential weakness to the internal supply chain control is technological change,
regarding the change of computer systems such as new software programs and updates as well as
new equipment. This can be seen as threatening to the internal supply chain, especially to
employees, if they feel that new robots will replace them in specific tasks, or if it is hard to come
to terms with working alongside the new technology. It could lead to the creation of extra costs
to fund training and various workshops. (Lambert, at el, 2005)
1.3 Strategies to be adopted to encounter the challenges facing Internal Supply Control
The argument of which is more important- the internal or external supply chain- is still open for
debate. Threats, such as the ones mentioned, strengthen the internal supply chain control and
prove its worth to the success of the company. (Lorentz, Juuso Töyli, Solakivi, & Ojala, 2013)
1.3.1 Adoption of Information technology
Telecommunications and computer technology allow all the actors in the supply chain to
communicate among each other. The use of information technology allows suppliers,
manufacturers, distributors, retailers, and customers to reduce lead time, paperwork, and other
unnecessary activities. (Humphreys et al. 2001).
1.3.2 Adoption of Planning Tools
Internal Supply Control depends much on Supply chain management planning tools which are
intended to integrate the resource planning activities in a firm or organization. Some of the most
common planning tools are: material requirement planning (MRP), manufacturing resources
planning (MRPII), and Enterprise Resource Planning (ERP). (Kazemkhanlou, et al, 2014)
1.4 Conclusion
Therefore having a solid risk management strategy can help you mitigate common failures in
internal supply chain control. A well-planned and executed strategy can help you minimize and
control the impact unexpected events can have on organization supply chain, while maximizing
the opportunities they can present.
References
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London UK
Quayle, and Basnet, Chuda, (2006) The measurement of internal supply chain integration,
Management Research Review
Croxton, Keely L.; García‐Dastugue, Sebastián J.; Lambert, Douglas M; Rogers, Dale S., (2011)
The Supply Chain Management Processes, The International Journal of Logistics
Management
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Metrics for Supply Chain Management, Engineering Management Journal
Kazemkhanlou, Hamid; Ahadi, Hamid Reza (2014) : Study of Performance Measurement
Practices in Supply Chain Management, Proceedings of the 2014 International
Conference on Industrial Engineering and Operations Management Bali, Indonesia
Lambert, Douglas M. ; García‐Dastugue, Sebastián J.; Croxton, Keely L., (2005), An Evaluation
of Process-Oriented Supply Chain Management Frameworks, Journal of Business
Logistics
Lorentz, H., Juuso Töyli, Solakivi, T. & Ojala, L. (2013), Priorities and determinants for supply
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Publishing House,.
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