good day please help me with this question you are required to critique the strategic importance of procurement and inventory based on its purpose in the supply chain (safety/buffer stock and seasonal stock) in relation to Nestle. At Nestle, sending a purchase order to a supplier, it is necessary to have some internal agreementon what is required, together with an audit trail of approvals for that requirement.A Purchase Requisition (PR) provides this facility and is an internal request to purchasing. Once ithas been electronically signed off (workflow), it can be used to generate a Purchase Order, which isan external request to the Nestlé's supplier.A purchase requisition is an internal request at Nestle to purchasing. You ask the buyer to providea certain quantity of a material or service on a certain date. A purchase requisition can be createdautomatically by MRP or manually created. The MRP controller can also convert a planned orderinto a purchase requisition. Source determination is a separate function. The buyer receivesproposals if, for example, fixed vendors or outline agreements exist for the material.The material requirements planning, inventory, production, and procurement processes all worktogether to orchestrate a smooth flow of high quality material. Workflow events are configured toNestlé's requirements by taking into consideration the degree to which automated or manualcontrols are required. Vendors quotation and selection processing is also done with great focus onthe SAP implemented for that purpose at Nestle. The materials requirement planning system atNestle usually makes good a calculated definition about the requirements for a particular territoryand at all locations over the enterprise. The stock management system collaborates with theinventory system in the SAP system to manage its products. Procurement and Inventory management at NestleNestlēThe procurement life cycle followed by Nestle is broken up into several integrated components inthe business and involves large number of intermediary processes like purchase requisition,purchase order, vendor involvement, goods receipt and inventory management and accountspayable. All these processes make together the life cycle of procurement process.Each time an inventory item is received or issued from the inventory at one of the Nestle locations,the system automatically updates stock quantities and values, and reduces inventory. Timeconsuming tasks are simplified through determining optimum source of supply, analyzing andcomparing vendor pricing, issuing purchase orders, managing the authorization for purchaserequisitions, processing invoices for payment and recording the same. The efficient supply chain atNestle requires all stock planning and operational activities to be integrated into a uniformbusiness-process flow.At the inventory management there are three types of Goods Movements namely goods receipt,goods issue and transfer posting. As soon as the goods movement is entered stocks are updated,material documents are created to record the event and accounting documents are created whenchange in valuation area occurs.

Nestle is a multinational food and beverage corporation headquartered in Switzerland that operates…

Answered: you are required to critique the…

you are required to critique the strategic importance of procurement and inventory based on its purpose in the supply chain (safety/buffer stock and seasonal stock) in relation to Nestle.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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