9. What possible changes do you think could be made to this process in order toaddress the above issues? AcknowledgementThis exercise is inspired by .Exercise 1.7Consider the following process at a company of 800 employees in theearly 1990s.Almost any employee at the company can initiate a purchase request by filling in aform. The purchase request includes information about the goods to be purchased, thequantity, the desired delivery date, and the approximate cost. The employee can nominate aspecific vendor. Employees often request quotes from vendors in order to get the requiredinformation. Completing the entire form can take a few days as the employee often does nothave the required data. The quote is attached to the purchase request. This completed requestis signed by two supervisors. One supervisor has to provide a financial approval, while theother supervisor has to approve the necessity of the purchase and its conformance with thecompany’s policy (e.g., if purchasing a software tool, is it compatible with the company’sstandard IT operating environment?). Collecting the signatures from the two supervisorstakes on average 5 days. If it is urgent, the employee can hand-deliver the form, otherwiseit is circulated via internal mail. A rejected purchase request is returned to the employee.Sometimes, the employee makes minor modifications and resubmits the purchase request.Once a purchase request is approved, it is returned to the initiator of the request. Theemployee forwards the form to the purchasing department. Employees often make a copy ofthe form for their own record, in case the form gets lost. The purchasing department checksthe completeness of the purchase request and returns it to the employee if it is incomplete.The purchasing department then enters the approved request into the company’s enterprisesystem. If the employee has not nominated any vendors, a clerk at the PurchasingDepartment selects one based on the quotes attached to the purchase requisition, or basedon the list of vendors (also calledmaster vendor list) available in the company’s enterprisesystem.Sometimes, the quote attached to the request has expired in the meantime. In this case, anupdated quote is requested from the corresponding vendor. Other times, the vendor whosubmitted the quote is not recorded in the company’s enterprise system. In this case, thepurchasing department should give preference to other vendors who are registered in theenterprise system. If no such vendors are available or if the registered vendors offer higherprices than the one in the submitted quote, the purchasing department can add the newvendor into the enterprise system.When a vendor is selected, the enterprise system automatically generates a purchase order.The purchase order is sent to the vendor by fax. A copy of the purchase order is sent to theaccounts payable office. This office, part of the financial department, uses an accountingsystem that is not integrated with the enterprise system, where purchase orders are stored.
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