Type: Process Essays
Sample donated: Roosevelt Sharp
Last updated: December 20, 2019
What is a low dollar purchase system? Provide examples of systems or tools that support low dollar purchasing.
Low dollar purchase system is a system that gives a proficient distributed method of procurement for the non-respectively lower dollar services and goods here other means such as Standing Purchase Orders and Corporate Purchasing System are not acceptable. The low dollar purchase systems are placed directly with the suppliers, and the invoices received from suppliers. This procedure reduces cycle time and the paperwork related with the issuing of purchase orders and purchase requisitions.
Some of the tools that support the low dollar purchase system include the procurement card system (P-card), check request, limited cash draft, and credit card systems (Monczka, Handfield, Giunipero, & Patterson, 2016).1. Discuss the advantages and disadvantages of a procurement card system. What is purchasing’s role with P-Card systems?P-Cards have remained a vital component in various fields of purchasing since it had become a standard (LGMT, 2018). Purchasing professionals consider these advantages and disadvantages of the procurement card systems. Some benefits of the procurement card system are bolstering the relationship between the suppliers and purchaser.
The P-Card might help to reduce the cycle time for purchasing transactions costs. The procurement card could provide proper accountability and to render appropriate control to restrict buying non-authorized items. Some disadvantages are procurement cards not being used as anticipated. Some might not use the card due to lack of benefits, such as frequent flier miles. Another downside is lack of data reporting for tax purposes, and the system cannot identify all card usages (LMGT, 2018).
The role of purchasing is to train and administer functions for new cardholders. They validate all outstanding cards, track credit limits, and audit cardholder compliance and activity. They also deal with usage rebates with the bank.2.
Describe the main activities that occurred during PPL’s three-phase systems development.One of the main activities that occurred was the establishment of the Passport. The passport system was designed using the Oracle platform by using the external developers (LGMT, 2018). A significant benefit was reducing the number of service orders with no accountability.
The passport process becomes integrated into the inventory management which led to the acceptance and installation of the Passport. 3. What should be Purchasing’s role during the development, implementation, and continuous use of low dollar purchase systems?The role of Purchasing will primarily involve the maintenance and management of the low dollar purchase systems. Purchasing professionals will administer the deployment of low dollar systems that should include the enhancements and changes. Maintaining the systems is a critical aspect of the role of purchasing.
4. What are some of the unique operating requirements that PPL faces that most companies do not face?The procurement of PPL has lowered its operational costs to succeed in the intensely competitive market in the deregulated era (LGMT, 2018). This has motivated other in purchasing to develop process and systems that reduce transactions and the effort needed to process low-value items.
This operation requirement has helped PPL to minimize the competition since other companies do not use it.5. What might make PPL’s system more efficient and effective in the future?PPL plans to establish better relationships with suppliers to enable all quality and inspection work (LGMT, 2018). This link could enhance the integrated passport system by reducing cost by streamlining the process of lower value or repetitively ordered items (LMGT, 2018).