1. ? Categorize the purchase categories at Amalgamated. (see exhibit 1) I will classify them into four categories by consideringthe costs and risks: Critical, Strategic, Tactical and Leverage.
Critical: Network(LAN), Application Support(core),Database & operating system, System admin, Strategic: ATM servicesTactical: ApplicationSupport(non-core), Security, Consultancy, Legal servicesLeverage: Network(WAN), Infrastructure, Property,Construction, Advert & Publicity, Diesel & other goods & services2. Assessment of the strategy for purchasing these categories.The purchasing strategy at the Amalgamated is unreasonable. According to the case, there have two ways tobecome the suppliers at Amalgamated bank: submit the application and recommendedby executives, and those suppliers could be arranged by each department. Thisphenomenon caused some issues like quality, delivery and pricing due to thelack of investigation of the suppliers’ performances and reputation beforecollaborated. Furthermore, it occurs paid different prices for a same product;the employees have never been stop by the suppliers’ plants; the duties foreach department are disordered. In other words, they don’t have unitive rulesand regulations to filter and manage the suppliers. Therefore, the bank shouldarrange suppliers by the categories that listed above.
For instance, gatheringall the suppliers in “Critical” categories into one long-term contract due tothe high risks. 3. Describe the role or the importance of the procurement function atAmalgamated.
Having a qualified purchasing department amount toa strong backup for Amalgamated. It is very significant to the bank. If morequality issues of the purchasing items like the case mentioned, the more lossesthe bank will be. Because the defective goods are futile. Moreover, they wastemore time to re-order them and cost more simultaneously.
Meanwhile, a responsiblepurchasing function not only increase the efficiency of the bank, but alsoimprove the customer satisfaction if they will enhance the quality andjust-in-time delivery.