Procurement and Inventory Management Essay Example | Topics and Well Written Essays - 2500 words - 1

Procurement and Inventory Management - Essay Example Better working practices are never achieved because Sound Electric Limited lacks a clear policy document or procedures of operations which touches on contracting and purchasing.There is poor record keeping technique such that it is always hard for the company management employees to retrieve updated data along with more current entire company’s level of stock. It is also hard for the auditors to retrieve the same data a thing that will result in improper auditing thus creating room for theft in the company. The resultant effect is the failure in closely controlling the company’s working capital thus failing to monitor correctly the true business progress. The whole system lacks accountability due to the fact that stock control and purchasing performance are not very well monitored making the staff determine their own precedence thus unbalanced cost considerations a thing that can greatly contribute to the failure of the company. Invoices are settled without a delivery p roof or even a certification as to whether the items received are the actual quantities reflected in the invoice. The company has been greatly undermined by the suppliers who feel that Sound Electric Ltd has poor specifications. There is lack competition when it comes to purchasing, requires no confirmation as to the obligations met by the contractors, does not negotiate for the price reduction, the company’s contracts fail to have conditions attached and lacks important knowledge about the contractor’s financial capability.