Environmental Issue Essay

Poor waste management is one of the major problems that have vast social-ecological and economic negative effects on a global scale. This has resulted from the fast growth of the urban centers which form the main source of wastes and its poor management by the respective authorities. Indeed, over 90% of the total major cities globally have problems related to waste management (Bureau of National Affairs, 2007). However, cities in the third world economies are affected more by the problem than those in developed countries. Urgent measures are therefore required to address the problems and therefore guarantee ecological sanctity and social integrity of the affected systems. Use of qualitative and quantitative data Addressing the problem of the wastes in the urban regions demands the collection of factual information to establish the correct methods and ways that can be used to address the problem. Taking into consideration that the problem has escalated over a long period of time, use of qualitative data would provide the relevant descriptive information for the waste and therefore aid in determining the best modes of addressing the problem (Toma, 2008). Wastes from the cities can be qualitatively categorized as solid and liquid wastes. The data can further be descriptive of the biodegradable wastes, plastic wastes, pharmaceutical wastes, and sharps. Quantitatively data on the other hand would be very essential in understanding various quantities of the qualitatively categorized wastes. Understanding the statistics provides the respective authorities with the relevant information that can assist them in determining the mode they would use in countering the same problem. Chemical treatment of liquid wastes is sustainable and more effective for smaller quantities of liquid wastes while use of aerobic lagoons is better for larger quantities. Besides, understanding the quantity of recyclable materials in solid wastes makes it easier to calculate the economic returns of the recycled products (Toma, 2008). Hypothesis: Scientific process forms the best system for providing the solution of waste management in the cities. With the problem of the waste being a major source of ecological and social problems globally, it demands a holistic approach that appreciates the complexity of the issue and therefore provide the best possible solution. It is worth noting that scientific method of addressing the problem is based on factual information that is qualitatively and quantitatively derived. Therefore, will be able to assess and address actual problem affecting the people and the ecological systems. All aspects of urban wastes are scientifically derived and science only would interpret them on the same tone to establish means of reducing their effects (Worldwatch Institute, 2009). Socially, addressing the problem using scientific methods aid in ensuring that As a result, it has the ability to link the cause and consequences of the negative effects of the wastes and provide a long term solution to them. Conclusion With the pollution problem threatening to get out of hand in the major cities, it has become important to address it in a sustainable mode. Scientific process will therefore be the best mode due to its thoroughness and intrinsic capacity to alleviate the problem. The demand for cleaner and healthier environment over the years has increased greatly globally. Therefore, taking into consideration that the urban centers are growing faster than any other period in history, scientific process seeks to address the waste problem holistically at all levels. Most of the international considerations like Basel convention of 1989 and the United Nations Conference on Environment and Development of 1992 have called for scientific approaches to address the problem. The scientific process calls for effective consideration of the wastes from the point of production to disposal. Besides, it emphasizes on reduction of wastes at the source and application of the best systems that reduces its effects to the people and the natural systems (Worldwatch Institute, 2009). It demands for recycling of all the recyclable waste materials in the wastes a notion that goes a long way in improving the resources utility. Through use of the life cycle analysis/ end of pipe system, wastes are slowly turning into precious resources to be used in other areas like conditioning farms, irrigation, and making building bricks. Notably, the scientific process demands that cooperation be instituted at all levels of the waste management to harmonize the process and ensure long term sustainability. Finally, the scientific process sets effective standards that should be observed by waste producers and managements, and monitoring systems to ensure compliance. Reference list Bureau of National Affairs, (2007). International environment reporter: current report. Washington, D. C. : Bureau of National Affairs. Toma, V. (2008). Waste Management Research Trends. Basel: Nova Publishers. Worldwatch Institute, (2009). State of the World 2009: Into a Warming World. London: W W Norton & Co Inc.

The meaning of depreciation and why it occurs

1.What is depreciation and why do we account for it?Depreciation is the continous monthly devaluing of movable assets, allowed by SARS to enable concerns to cipher existent values on such assets. All movable assets depreciate in value over clip, as they are used in twenty-four hours to twenty-four hours concern and vehicles in peculiar lose value as they aquire Kms and acquire older The depreciation procedure allows concerns to let for replacing of such movable assets as good as to enable such concerns to sell off such assets when new 1s are neccesary 2.Do two vehicles of the same brand with similar characteristics deprectiate at the same rate. Why is this so? Vehicles of the same brand, could deprecate at different rates due to different applications eg a driver of one vehicle may make higher milage than the following. The status of the vehicle is besides influenced by its application ( what it is used for ) every bit good as driving manners service intervals, accidents etc. 3.What factors, exept the brand of the vehicle, act upon the monetary value of a second-hand auto? Used vehicle values are influenced by a big assortment of factors, of which supply and demand most surely have the biggest influence. Other factors which are of import to observe are: 3.1 General status of the vehicle 3.2 Cost of fixs neccesary to market the used vehicle efficaciously, eg Tyre wear, etc. 3.3 Mileage 3.4 Age or Year theoretical account 4. If a newer theoretical account of a auto comes out, how does this impact the monetary value of the old theoretical account and the second-hand market? A new theoretical account does non neccesarily act upon the monetary value of a used theoretical account negatively.This procedure is driven entirely by supply and demand. There are many cases of used vehicles really appreciating after a new theoretical account is launched. Major conrtibuting factors to such scenarios would be the monetary value, handiness, and popularity of the freshly launched theoretical account as opposed to its pre dessesor.eg The new theoretical account may non be as popular due do whatever ground ( monetary value, reliabilty, features etc ) A good illustration of this is the Toyota Landcruizer Pickup ( these vehicles really increase in value because of the of all time increasing monetary value of newer theoretical accounts ) I many cases the opposite is true. Newly launched theoretical account genarally offer more characteristics as good every bit good as modernised styling and forms and the increased demand may so influenceowners of old theoretical accounts to purchase, doing an over supply on used theoretical accounts, therefore act uponing valuse of used vehicles negatively. 5.How does VAT work in the sale of a second-hand auto? Input VAT is claimed by the trader on the prurchase monetary value ( trade-in monetary value ) at the set rate, effectivley devaluating the vehicle by 14 % at the current VAT rate. A net income border is so added to the adjusted cost monetary value of the vehicle and VAT added to the amount of the adjusted cost monetary value plus the net income border ( retail monetary value ) VAT is hence efficaciously charged merely on the accomplished net income of a used vehicle 6.Are there any guidelines when pricing a second-hand auto? The most normally used guidline is a used value brochure issued by Mead and Mcgrouther, naming used vehicle values by maker per theoretical account derived function. These guidelines are compliled by manner of a complex coverage system aquired by the providers of the brochure from information gathered monthly from a broad spectrum of traders who report to Mead and Mc Grouther on the follwing issues. 1. Higest monetary value realised on each specific brand and theoretical account. 2. lowest monetary value realised on each specific brand and theoretical account 3. Condition of the vehicles reported, categorised into exellent, good, just etc 4 Mileage of the vehicles reported The guidelines in the brochure list both the suggested trade in monetary value every bit good as the suggested retail monetary value. These monetary values, used in concurrence with a formulated graph in the dorsum of the brochure, stipulating the per centum allowed for addition/deduction as per the status of the vehicle and its milage determines the guideline used by the trader to explicate a value. Other factors which may act upon this value are fixs neccesary to market the vehicle effectivley as stipulated under inquiry 3: 7.What can a concern or individual do to act upon the monetary value that they could acquire for a trade-in? 1. Ensure that your auto is clean and free of defects 2 Service on a regular basis with a commissioned service fix Centre ( perferably with a franchise trader ) 3. Ensure that the service manual is up to day of the month and in the vehicle for review 4. Keep elaborate transcripts of all interventions/repairs and service bills as a history file for anterior review when merchandising the vehicle 8.Is there a peculiar clip of the twelvemonth that it is better to purchase or sell or trade-an a vehicle? Historically makers tend to lauch new theoretical accounts at twelvemonth terminal. In the yesteryear, it was possible to registry such freshly lauched theoretical accounts in the undermentioned twelvemonth provided the vehicle was registered within 21 yearss of reception of the vehicle as per the 21 twenty-four hours temporay license issued. However the new Natis systemdoes non let for this and it is hence unpointed buying a vehicle before twelvemonth terminal. It would besides be wise to take monetary value hikings, historically scheduled by manufactureres for near on twelvemonth terminal, into consideration in concurrence with the twelvemonth of regiistration eg.it would non neccesarlily be better to wait a month or so to enable you to purchase a auto registerd in the undermentioned twelvemonth if monetary value hikings eliminate the salvaging you may hold had when trading in your vehicle Cheaper vehicles tend to bring better monetary values during Jan through the first portion of Feb as demand is increased by pupils, and public-service corporation type vehicles tend to bring better monetary values at the start of the vacation seasons 1.What is depreciation and why do we account for it? The older the vehicle the less the trade in 2.Do two vehicles of the same brand with similar characteristics depreciate at the same rate? Why is this so? The first twelvemonth both autos will deprecate approx 37 % .A It usually depreciates between 27-30 % , evidently the more expensive the vehicle, the more depreciation in rand value 3.What factors, except the brand of the vehicle, act upon the monetary value of a second-hand auto? Vehicle must be orderly and tidy ; tyres in good status, non involved in an accident, upholstery in good status, the lower the milage the better, no bit marks on windshield, rust free 4. If a newer theoretical account of a auto comes out, how does this impact the monetary value of the old theoretical account and the Second-hand market? Normally if a new theoretical account comes out, it comes with an addition in monetary value, to acquire rid of old theoretical accounts ASAP ; A all depends on the fiscal place of client, if a smart face lift of the new theoretical account, client will instead purchase new one 5.How does VAT work in the sale of a second-hand auto? Precisely the same for new autos, VAT is collectible for both 6.Are there any guidelines when pricing a second-hand auto? One has to follow the guidelines in the Mead & A ; McGrouther ; following taken into consideration: A low milage, status, tyres, rust, accident free 7.What can a concern or individual do to act upon the monetary value that they could acquire for a trade-in? Same as inquiry 3 8.Is there a peculiar clip of the twelvemonth that it is better to purchase or sell or trade-an a vehicle? If you trade in a vehicle in Nov/Dec you will acquire more, but on the other manus if you buy in January, auto will be registered in the New Year.Section 11.What is depreciation and why do we account for it?Depreciation is the lasting and go oning decline in the quality, measure or value of an plus. Depreciation Accounting trades with the allotment of costs of fixed assets over their utile lives. For illustration, when we buy fixed plus like mill machinery, this is simply an beforehand payment of which we expect that this fixed plus is able to heighten or gain certain net incomes for the concern. Over a period of clip, the fixed plus we buy will go valueless or unable to bring forth the necessary net incomes. To reflect this go oning decline in the value of the mill machinery, we need to use depreciation accounting. The grounds for depreciation are: wear and tear, obsolescence, falls in market monetary value, effluxion of clip, physical factors, and insufficiency. Reasons why we account for depreciation are: to determine the net earnings/profit for an accounting period, depreciation demands to be computed. Depreciation usually constitutes a major portion of the disbursals of the concern. As the concern buys fixed assets, it expects the fixed assets over the utile lives are able to bring forth the necessary grosss for its concern. Whilst grosss being earned and if there is no allotment of depreciation cost to fit this gross, income will so be overstated. Besides, fixed assets in the Balance Sheet will be overstated if depreciation is non provided for. Merely that portion of the costs of fixed assets that have non expired should be reflected in the Balance sheet otherwise the fiscal statement would non reflect a true and just position. And if depreciation is non provided for and presuming if the whole net incomes were withdrawn during the life of the plus, extra capital would hold to be raised when it is clip to replace the fixed assets. By bear downing depreciation against net incomes, the ultimate residuary net income available for distribution is lowered and that financess are retained in the concern for future replacing 2.Look in a newspaper for two different makes of new autos ( e.g. A Hyundai and a Mercedes ) of your pick and note their monetary values. Find the same two makes of autos with similar characteristics for sale second-hand guaranting that they both are every bit old as the other ( e.g. 2 old ages old ) . Calculate how much each brand of auto has deprecated per centum wise over the clip period. Did both makes depreciate by the same per centum? Explain why do you believe this is so? The depreciation of a vehicle largely depends on the application of it by the driver. Therefore, two vehicles of the same brand and theoretical account may deprecate a different rate. A vehicle will usually deprecate at a rate of 27-30 % per twelvemonth. 3.Besides theoretical accounts, describe other factors the influence the monetary value of a second-hand auto. Second manus auto monetary value must be based upon the marketability of the auto, which you wish to sell. If brand and theoretical account of your auto is new, so decidedly you may wish to sell it every bit shortly as possible. Other factors which may act upon the monetary value of a second-hand auto are: milage, status, particular characteristics of the auto, who has been driving the auto, gasoline ingestion and has any major decorative or mechanical betterments been made to the auto recently. 4.If a new theoretical account of a peculiar auto comes out, how does that impact the monetary value of the old theoretical account and what consequence does this hold on the second-hand market? When a newer theoretical account of a auto comes out, the monetary value of the old theoretical account will be cheaper. This is due to the fact that the older auto theoretical account is out dated. Its engineering is less advanced than the newer theoretical accounts. On the other manus, a vehicle may be popular and therefore the monetary value will go on to increase. 5.How does VAT work in the sale of a second-hand auto? There are two ways in which motor traders handle VAT on used vehicles. Some charge VAT merely on the net income they make on the sale of the auto. This is known as the second-hand border strategy, used by most auto traders. Alternatively, they can bear down VAT on the entire dealing cost – that is the second-hand merchandising monetary value achieved. It depends on how they choose to maintain their records. The second-hand border strategy requires more paperwork from the trader. He must, for illustration, maintain the relevant stock books, which include inside informations such as the auto ‘s engine figure. Each method of bear downing VAT is legal, and HMRC is concerned merely that the trader tells them which strategy he is utilizing. There is no duty for the trader to state the client at the beginning which method of bear downing VAT will be used. Nor is at that place a legal right for the client to cognize, or be told, how much of the monetary value comprises VAT. Yet as VAT on the full purchase monetary value is likely to be instead more than VAT on the trader ‘s net income on the dealing, it seems to me worth inquiring which method of bear downing VAT a auto trader uses before make up one's minding to purchase.6.Are there guidelines for all traders when pricing second-hand autos?Pricing of used autos can be affected by geographics: for illustration, a saloon will do more sence in a metropolis than in an waterless country where it is hard to drive. Similarly, pickups are frequently more in demand in rural than urban scenes. Condition – Is the auto in excellent, good or just status – has a major impact on pricing. Condition is based on visual aspects, vehicle history, mechanical status and milage. There is much subjectiveness in how the status of a auto is evaluated.7.List some things a individual or concern can make to act upon the monetary value that they could acquire for a trade-in?When it comes to acquiring value for y our trade-in, one should ever make 1s homework.The key to making good in a dealing with a trader is to be knowledgeable.Before heading to the auto batch, research your auto online. One should understand the market every bit good. Be realistic about what you ‘re selling, expression at your milage and how good the auto has been kept. All these things come into drama when valuing your auto. Cleaning your auto may somewhat increase your autos book value. Regardless of what the car pricing ushers say, it ‘s up to the trader to accept your trade-in. So, it ‘s of import to look at your auto or truck from the trader ‘s point of view.One of the franchise ‘s major concerns is finding how rapidly your trade-in is likely to sell to another purchaser. When trading-in a auto, a trader looks at the vehicle, walks around it, look into it to see if it ‘s had pigment work and look into to see if any harm has been done to it and take the vehicle for a thrust. They will look into to see what mend the vehicle will necessitate to acquire up to standard or they have to make up one's mind if it would be excessively much to hold the fixs done. They will besides be cognizant of what a auto is presently selling for. A smaller auto trade-in that are in great status menu better right now.If you have a clean, used auto, with no accidents and no amendss, and if it ‘s a four-cylinder or six-cylinder engine, it will convey a just monetary value. Of class, it ‘s up to the consumer to research in progress what that just monetary value could be. If you ‘re merchandising in a newer-model used auto, so surprisingly, it could work against you. If it ‘s a twelvemonth or less, the auto could still be viing with new cars of the same brand and theoretical account. In add-on, the maker may be offering particular inducements for the new auto. Separate the trade-in and new auto transactions.There are many variables involved in buying a new ( or new-to-you ) auto, including the finance rate, new auto monetary value and down payment sum. Make certain the monetary value you get for your trade is non affected by any of them. The first trader you meet, maintain your options open when negociating a trade in, do non restrict yourself to merely one trader.Section 21.What is an plus registry and what does it include?The plus registry is a tool, which helps you to remain in control of your assets in a simple and efficient mode. Here, you register all the inside informations for each single plus: designation figure of plus, description of plus, on which day of the month it was bought, cost, how it was financed, rate and method of depreciation, one-year depreciation for each twelvemonth of its life, current book value, day of the month of disposal and returns from disposal.2.How does a concern make up one's mind what vehicle to buy-model, do, colour, ect? On what are these determinations based?Obviously fundss will be the biggest factor when make up one's minding what vehicle to buy. The vehicle must be low-cost, fuel efficient and easy maintained to cut down the running cost. It will besides hold to an intended intent. For illustration, an electrician requires a pick-up truck to be able to transport his equipment ; a saloon will be of no usage to him at all. A company like Henning Crushers will purchase big choice truck to transport bricks and other natural stuffs.3.What method and rate of depreciation does your concern usage and why?A concern like Henning crusher depreciates its vehicles at a rate of 15 % a twelvemonth on the cost monetary value method. This is due to revenue enhancement intents and the fact that a vehicle will deprecate really rapidly.4.How does a concern decide when to sell or merchandise a vehicle?What form is your used auto in? If your auto is in good form, you might see selling it yourself. If you need to do fixs, though, you need to chew over how much you ‘re traveling to put in the fixs. The truth is you might non reimburse the full investing. So, weigh the possible cost of fixs against the potency added value. Regardless if you sell or trade in your used auto, it has to be in good form. Follow my bit-by-bit instructions for selling or trading in your used auto. A batch of research is necessary whether you sell or trade in your used auto. Trading your used auto in requires traveling to the top three rating sites: Edmunds.com, kbb.com, and NADA.com and set uping a monetary value you will realistically acquire for your used auto if you trade it in. Selling your auto requires the same measure, but it besides requires you researching the best methods for selling your used auto. You besides have to research how to do the transportation when the clip comes every bit good as research what others in your country are seeking to sell their used autos for. Do you like paperwork? When you sell your used auto to a trader, the franchise has staff to manage the paperwork for you. Basically, you drop off the keys and they present you with a neat and tidy bundle of documents to subscribe. Your home bases either get transferred or you get a new enrollment depending on your province ‘s patterns. When you sell your used auto to a private purchaser, you have to make all the paperwork yourself. You have to do certain the dealing is handled decently and the rubric transportation is done right. Make it wrong and you could go on to be the proprietor for revenue enhancement and liabilities of the vehicle. Plus, you have to travel to your motor vehicle office and consequence all the necessary paperwork alterations. What is your clip worth to you?5.Why is it of import to reexamine the value of a vehicle from the point of position of sing them?Vehicle insurance ( besides known as car insurance, auto insurance, or motor insurance ) is insurance purchased for autos, trucks, and other vehicles. Its primary usage is to supply protection against losingss incurred as a consequence of traffic accidents and against liability that could be incurred in an accident. Harmonizing to the insurance policy, a plus must be insured as near to its true value as possible. If the vehicle were to be insured for a higher value than it is genuinely deserving and a accident or larceny takes topographic point, the insurance company will pay ou less than for what the vehicle is insured. Therefore you may do a loss. This state of affairs is known as over-insured. While being under-insured, will intend that you will be paid out less than the vehicles true value in instance of a ccident or larceny.6.What does the concern do to seek to keep the value of its vehicles?A vehicle care log is a diary of all care performed on a peculiar vehicle. Each entry includes a day of the month, milage as of that twenty-four hours, inside informations about the type of work done, and who performed the service. The care log might besides include grosss and a agenda for farther care. One of the most common grounds to maintain a vehicle care log is for a leased auto to demo that you have honored your terminal of the rental contract by maintaining up with standard care on the vehicle at, or prior to, the maker ‘s suggested clip intervals. A vehicle care log will clearly demo oil alterations, tyre rotary motions, brake reviews or replacings and so on. At the clip you return your vehicle from rental, you may be asked to turn out that the auto was maintained decently. The vehicle care log will come in really ready to hand. Another common ground to maintain a vehicle care log is when utilizing a company auto. Often it is required in this instance for revenue enhancement intents. Everything related to the auto, abruptly of utilizing it for pleasance, is a write-down for the company. This includes gasolene and all care. Therefore rigorous records are required. A vehicle care log works absolutely. Similarly, if utilizing your private auto for company concern a part of gasolene, milage and care might be revenue enhancement deductible. Often, concerns will reimburse you alternatively, but in either instance a vehicle care log is required. Whenever the auto is used for concern intents, get downing and stoping milage must be noted and dated in the log. However, a vehicle care log is a good thought for anyone. It ‘s easy to bury how long it ‘s been since certain care has been performed without a record. Again, a good kept up auto is a safer auto and can take to salvage money on fixs down the route. Besides, cogent evidence that you have maintained your vehicle decently is really of import to the following purchaser and really increases the value of the vehicle. It exudes an air of attention and meticulosity, and a auto that has been maintained is less likely to hold or develop serious jobs. Finally, when you do hold to take the auto in for fixs, it ‘s ready to hand for the technician to see the work that has already been done. There are many ways to make a vehicle care log either utilizing a simple clean logbook or a spreadsheet in a plan such as Excel. However there are besides package plans like Automotive Wolf by Lonewolf Software that will non merely maintain path of your care but will cipher your gas milage for you and much more. Automotive Wolf besides has an attractive â€Å" vehicle interface † that uses gages to allow you cognize when certain care is due. This package and plans like it are modestly priced and free to seek if downloaded off the Internet. If utilizing package, it ‘s a good thought to maintain a simple coiling notepad in your baseball mitt compartment to jot down milage and inside informations that you can later enter into the package or spreadsheet. Some software-based vehicle care logs are designed to run on Portable Digital Assistants ( PDAs ) so you can come in your information right from the drivers seat! Whether you take the simple path of doing your ain log, or a fancy option, maintaining a vehicle care log is a smart move that can merely work to your advantage!7.Does the concern normally make a net income or a loss on gross revenues of vehicles? Why?A loss. This is due to factors like depreciation, use and the wear and tear of a vehicle of a clip period. Besides, newer theoretical account and engineering are invariably being released into the market.8.What internal control processes does your concern have to pull off its touchable assets?Procedures effected by an entity ‘s board of managers, direction and other forces, designed to supply sensible confidence sing the accomplishment of aims in the undermentioned classs: Effectiveness and efficiency of operations ; Reliability of fiscal coverage ; and Compliance with applicable Torahs and ordinances. Accurate and complete historical accounting and fiscal statement information Performance direction procedures Strategic planning Budget and prognosis mechanism – Capital outgo analysis, budgets, and direction – Cash flow direction Established precedences that align operations – Coordinated functional activities – Infrastructure that facilitates activity and does n't restrain operations Business hazard analysis and direction plans Accurate, defendable ratings of touchable assets play a critical function in many concern state of affairss, runing from the mundane to the esoteric. Real and personal belongings ratings are of import for revenue enhancement and fiscal coverage, plus monitoring, belongings insurance, ad valorem revenue enhancements and replacing budgeting. At the other terminal of the spectrum, rating of assets can be an indispensable tool in set uping monetary values, warranting places to shareholders and fulfilling governmental concerns in the class of corporate amalgamations, acquisitions, refinancing and restructuring.GlossaryAsset- In concern an accounting, assets are everything of value that is owned by a individual or company. Any belongings or object of value that one possesses, normally considered as applicable to the payment of one ‘s debts is considered an plus. Simplistically stated, assets are things of value that can be readily converted into hard currency. Examples of assets are: hard currency, pre-paid expences, vehicles, machinery, land and edifices. Fixed assets- Besides referred to as PPE ( belongings, works, and equipment ) , these are purchased for continued and long-run usage in gaining net income in a concern. This group includes land, edifices, machinery, furniture, tools, and certain wasting resources for example, forest and minerals. They are written off against net incomes over their awaited life by bear downing depreciation disbursals ( with exclusion of land ) . Accumulated depreciation is shown in the face of the balance sheet or in the notes. Current assets- Current assets are hard currency and other assets expected to be converted to hard currency, sold, or consumed either in a twelvemonth or in the operating rhythm. These assets are continually turned over in the class of a concern during normal concern activity. Examples of current assets are: hard currency, pre-paid disbursals, debitors and money in the bank. Depreciation- In simple words we can state that depreciation is the decrease in the value of an plus due to usage, transition of clip, wear and tear, technological outdating or obsolescence, depletion, insufficiency, putrefaction, rust, decay or other such factors. Straight-line depreciation-Straight-line depreciation is the simplest and most-often-used technique, in which the company estimates the salvage value of the plus at the terminal of the period during which it will be used to bring forth grosss ( utile life ) and will write off a part of original cost in equal increases over that period. The salvage value is an estimation of the value of the plus at the clip it will be sold or disposed of ; it may be zero or even negative. Salvage value is scrap value, by another name. Declining-Balance Method-Depreciation methods that provide for a higher depreciation charge in the first twelvemonth of an plus ‘s life and bit by bit diminishing charges in subsequent old ages are called accelerated depreciation methods. This may be a more realistic contemplation of an plus ‘s existent expected benefit from the usage of the plus: many assets are most utile when they are new. Value added revenue enhancement ( VAT ) – is a ingestion revenue enhancement levied on value added. In South Africa VAT is 14 % . While in Namibia VAT is 15 % .Section 3When opening a new moderate-sized concern, a vehicle is a really utile plus to acquire the concern off the land. To be successful, the concern must be cognizant of how it plans to acquire its vehicles, how to pull off the depreciation of the vehicles, selling the vehicles, keeping the vehicles and besides commanding the vehicles. Acquisition of vehicles: a concern must take several factors into consideration when purchasing new vehicles. First, a concern can purchase a vehicle foremost or 2nd manus. More factors like the colour of the vehicle, the intent it has to function and the cost of the vehicle have to be considered every bit good. Depreciation of vehicles: Depreciation is the lasting and go oning decline in the quality, measure or value of an plus. Depreciation Accounting trades with the allotment of costs of fixed assets over their utile lives. It is impossible to avoid depreciation. The concern must be prepared to set this disbursal.

Economics light Essay

Q1. Mention the problem? The problem of that case study is the organizational conflict i.e. every functional manager is trying to get his own interest; therefore, the working climate became disturbed. In other words, it is possible to say that it is a communication issue. Q2.What did sales managers do? The problem of the sales manager lies in focusing on getting more customers more than thinking of getting more profitable orders. Q3. What did manufacturing managers do?  The problem with the manufacturing managers consists in disordering of work steps, light color orders and dark color orders, which in turn wastes time and money. Q4. State your opinion to solve the problem? SOLUTION 1. Sales manager: He should modify the pricing policy for â€Å"rush orders† in a way that enables the company to exceed its breakeven point and get at least its profitable processing .i.e. to make a special price for rush orders. 2. Manufacturing manager: He should review the cleaning process and try to implement a more cost reducing efficient method. 3. General manager: * He should consider introducing a new machine, one for light color and the other for dark color, hence, reducing the cost of getting a new machine will be covered by eliminating the cost of cleaning and cost of time wasted. * He should ensure that the 250 workforce are aware of that every workers effort and role is step in many pre and post steps. Hence the notion of teamwork will prevail. * Every worker should be aware of not only his own task but also the tasks of all his coworkers to get the value of his own role and appreciate it so self esteem will prevail. * As for , the functional managers, especially, the manufacturing and sales managers should be aware of their critical position and try to be farsighted to the long run  objectives not only the short run. They should get rid of their personal interests and vision. They should cooperate and try to implement an overall objective. Done by Abdulla Talal Alsada BH05501669 SBI((FF))

Nike Corporation Case Study Essay Example | Topics and Well Written Essays - 2000 words

Nike Corporation Case Study - Essay Example When Nike sets a standard, the industry follows it like a tradition. In the consumer products industry there are two distinct marketing strategies. One is make to sell and the other is make to order. Everyone starts with the make to sell strategy by offering products they think should be bought by consumers. The focus is more on sales than on production. The risk is enormous and the fear of rejection is immense. With passage of time and a better knowledge of preferences manufacturing evolves towards the made to order strategy where the focus shifts to production capability and costs as the demand is now better known and the fear of rejection is almost eliminated. This now opens the avenues of larger markets including globalisation. To become a Global Player critical mass is a must for any multi-national company. This is the evaluation tool to find a company’s capability to survive both financially as well as exponentially. Global Distribution Network and economies of scale are the two key factors for ensuring success. Continuous availability of the product is a very important factor and this is possible by having a competent retail outlet set-up. Equally important is the supply chain and it must be geared up for local supplies at short notices. Lack of these facilities will result in loss of market and inhibit market penetration and dominance. In addition, achieving economies of scale through minimizing manufacturing costs is necessary for manufacturers to meet their financial goals and to erect a barrier for competition to encroach their markets via prices. The success of a business depends on how effectively a company uses its resources and maximizes production as per the market needs to meet its targ ets. In order to maximize one’s own production and profitability in business, it is essential that comprehensive planning on location of its production facilities is done to

International ManagementCase Study and Set the strategies Essay

International ManagementCase Study and Set the strategies - Essay Example It cannot also modify the product that it offers to the European market. The company will also have to deal with the high marketing expenses and will need to deal with the government authorities in keeping with their regulations on exporting. 2. Enter into an alliance with a large European company. Entering an alliance with a European company offers myriad of benefits for Dale. For one, this will enable the business organization to share risks and costs associated in entering the European market. Since, it will be dealing with an established firm which is already prominent in the target market, its entry will be much easier. Conforming to government regulation is also facilitated by the partnership. It should be noted that governments often favor local companies than foreign ones. Through the partnership, Dale will also benefit from the European company's knowledge and brand equity in the market together with the technology and other expertise of its partner. However, drawbacks can include mistrust in sharing proprietary technology and cultural clashes. Dale also has to deal with how to split the profit noting the asymmetric investments by the partners. 3. Manufacture the product in the United States and set up a wholly owned subsidiary in Europe. Manufacturing the product in the home country will enable Dale to reap economies of scale in production. Setting up a wholly owned subsidiary in Europe will allow the company to control marketing tactics and building brand image. It will also enable Dale to learn more about the market and tailor its product according. However, this will present concerns over government regulation and having to deal with a workforce with a different culture. 4. License a European firm to manufacture and market the phone in Europe. This will benefit Dale with a high return on investment as it will be given a high fee for the manufacture and marketing of the revolutionary wireless phone. No intervention in the foreign market is required as the licensee shoulders all the risk involved. The only downside is its inability to reap returns on manufacturing and marketing activities. It is recommended that Dale chooses to partner with a large European firm in manufacturing and marketing its product abroad. This partnership will enable the company to enter the market easier while using the strong brand equity of the large firm. Sharing the risk with another entity is a potential way of mitigating risk. It should be noted that its partner's knowledge about the market will allow it to tailor its product according to unique needs of its target market. Section 2. 1. How does expanding internationally benefit Wal-Mart In the international arena, Wal-Mart recognized that opportunities in the home country were becoming constrained. Wal-Mart is benefited from the international expansion through capturing a wider market base. It should be noted that as most developing economies improve their condition, opportunities abroad abound. The higher income in foreign markets represents profit prospects for retailers. The company also reaps economies of scale in purchasing and ordering due to its strategic partnership with merchandise suppliers. International expansion also enables it to employ its expertise and capabilities while banking on its strong brand equit

Analysis of Financial Service Industry Literature review

Analysis of Financial Service Industry - Literature review Example Besides having a stronghold in the financial service industry, Citi Corp mirrors the vision and goals of Intersect Investments. Benchmarking is the process of observation and validation of procedures and practices that the most successful companies employ. It is a process of studying and following time tested practices from well-performing organizations to improve your own performance. In other words, it is the borrowing of standards for success. This involves determining where you need to improve, finding an organization that is exceptional in this area, then studying the company and applying its best practices in your firm. Benchmarking systematically studies the absolute best firms, and uses their best practices as the standard of comparison; a standard to meet or even surpass. Through a comprehensive assessment of strengths, weaknesses, threats, and opportunities of Intersect Investments, the management has realized that a lot of critical areas have to be reviewed if the firm is to achieve its goals and objectives. Issues range from redefining the organizational vision to devising a proper career incentive system for its employees. Sharing a similar organizational mandate, Citi Corp has fared a lot better in the industry particularly with regard to these critical areas. Citi Corp has long stood with its principle of customer intimacy and procedural simplifications. These principles have given it an edge over its competitors and made it one of the leaders in the industry for a long time. Given the nature of the products, services, and customer orientation involved, any business in the financial service industry cannot afford to ignore these basic values. Intersect Investments should do a proper visioning exercise and tune it properly to that of the Citi Corp. All the while, customer friendly services, and humanistic approach should be the cornerstone of the exercise. Employee turnover is increasing and the cost of employee turnover is expensive. Therefore, employee retention is critical. Numerous studies suggest that the majority of the workforce is considering leaving their current job for another as the economy improves. Based on this realization, Citi Corp strongly advocates employee retention and value system. Employee retention matters. A continual effort to replace departing workers-to keep the revolving door full, instead of stopping it altogether-is bleeding organizations dry. It is expensive to constantly replace people that turnover. The cost of attracting, recruiting, hiring, training, and getting new people up to speed is tremendously more costly as well as more wasteful than most realize. Second, productivity and profitability are directly tied to employee retention.  

Pedagory assignment Essay Example | Topics and Well Written Essays - 1250 words

Pedagory assignment - Essay Example This is unlike the white people who stand a higher chance of getting jobs and social positions. The white people are considered to be trustworthy as compared to the Asians. They also have a good reputation. Although the United States Congress formulated and established laws for prohibiting inequalities and racial discrimination, the mindset of the people still deeply influences their judgments and way of thinking. Unlike other races, the Caucasians do better in the society. They are considered to be the host of the land, though this cannot be historically proven. Their achievements in various fields are wider as compared to those of the other races. They are the majority occupiers of many of the major industries in the United States. This is despite the existence of other immigrants like the Asians and the Africans. Immigrants and minority groups are treated unfairly from the whites (William, 2005). They do not have the same access and convenience to some educational levels and job opportunities. People born in the United States, especially the whites have the advantage of getting the best educational levels and job opportunities in comparison with the others. The international students do not have equal opportunities to top-level colleges and job offers as the American students have. Many opportunities are only open for the American citizens in the employment fairs. The Asians and Jews are the two most highly educated groups in the United States. Despite their high levels of education, they do not get privileges when it comes to the real workplace. An employer in the United States would prefer an American student for employment as opposed to a Jew or an Asian. It would not matter that the Asian/Jew is highly learned and has wide experience as compared to the American student. This is a clear manifestation of how racial discrimination plays a significant role in the job

Movie Report over Good Fellas for Organized Crime class Essay

Movie Report over Good Fellas for Organized Crime class - Essay Example Plot summary The protagonist, Henry Hill ignores his father’s advice and decides to lead the life of a gangster. Henry joins a gang and his life as a gangster helped him to be independent. Paul "Paulie" Cicero (leader), Jimmy "The Gent" Conway and Tommy DeVito (associate members) are the members of Henry’s gang. Air France Robbery (1967) was Henry’s first robbery in his life as a criminal. Henry’s relationship with Karen (his wife) and Janice Rossi proves to be unsuccessful. Henry’s life as a criminal includes the murder of Billy Batts. Later, Henry’s gang leader asks him to conduct a crime in Florida but almost all the members got arrested. Gradually, Henry began to ignore the leader and indulged in more serious crimes. Later, Henry was imprisoned for his involvement in drug trade. This incident deeply influenced him and he decided to change his life. But other members of Henry’s gang (Paul Cicero and Jimmy) were not ready to change a ccording to the situation. Discussion: The discussion includes theme, message, genre and portrayal of life in the film. A. Theme As pointed out, the film’s theme is interconnected with organized crime and it’s after effects. ... To be specific, Henry was able to identify that imprisonment and drug addiction were the byproducts of organized crime. This deeply influenced him and his decision to keep away from the life of a gangster was based upon this self-realization. On the other side, other members of Henry’s gang were not ready to realize their mistake and were forced to be imprisoned. This is the basic difference between Henry and the other members of his gang. B. Message The director makes use of the protagonist (Henry Hill) as a mouthpiece to communicate with the viewers and to convey his message on criminal instinct and organized crime. The director portrays Henry’s life through the perspective of an onlooker. Within this context, one can easily identify that Henry’s life is symbolic of criminal instinct and redemption in the end. In the beginning of the film, Henry’s decision to join the gang changes his life. His decision was based on his attraction towards the life of a g angster, especially a life with independence and thrill. Gradually, he came to realize that the drawbacks in his life are interconnected with his decision. For instance, he was not able to maintain his relationship with Karen (his wife) and Janice Rossi and was forced to face imprisonment for a number of times. In short, the protagonist’s life represents the director’s opinion on criminal instinct and organized crime. C. Genre One can easily identify that the film Good Fellas by Martin Scorsese represents gangster movie genre. To be specific, gangster movies portray the life of gangsters who represent the darker side of human life with criminal instinct. Besides, gangster movies provide ample importance to violence and crime. In the film, the director provides ample

Domestic Terrorism Essay Example | Topics and Well Written Essays - 250 words

Domestic Terrorism - Essay Example For instance, the Southern Poverty Law Center (SPLC) reported that as of 2010, there were more than 1000 hate groups in America (Bjelopera, 2013). Furthermore, political polarization in the US has been intense in recent years, and there has been a widespread distrust in the government. These are some of the factors further contributing to the growth of domestic terrorists in the US. Although domestic terrorism is a threat, international terrorism is more dangerous to the general American public. This is because most of the domestic terrorists use non-violent approaches that do not directly cause harm to the American public. For instance, animal rights extremists use what they call ‘direct action’ which mainly involves protests and other resistance activities. In addition, non-violent criminal activities involving fraud and cyber-terrorism are also used by domestic terrorists, and these do not necessarily cause direct harm to the public (Bjelopera, 2013). However, for international terrorists, their main aim is usually to kill and cause maximum damage. For example, the 911 attack left more than 3000 dead and property worth billions of dollars destroyed. No domestic terrorist activity can ever get close to

Depression - Family and Community Experience Assignment

Depression - Family and Community Experience - Assignment Example The results are severe for patients below six years as opposed to the other category. Studies on the expressed emotions shows that families of patients suffering from chronic depression are easily predicted by higher levels of Expressed Emotions. Patients suffering from disorders associated with mood record a poor outcome from medical experts. Other studies indicated that spouses found it hard to share with the public about their spouses and this leads to reduced marital activities with the patient. In the long run, it happens that the patient feels unattended to and this further complicates his situation. This however results when the spouse to the patient feels embarrassed about the patient’s condition. Impacts of chronic illness and depression sharply differ from one society to another and from one country to another. Despite the variations, what is common is that the situation bears with it serious cost implications. A patient suffering from depression is considered a wast e to an economy in terms of productivity, this by it self is a form of a negative cost. Attempts in curative or reduction are yet other cost. In most set ups, human life is taken to be paramount and the responsibility is not left to the family alone but to the entire society. In some cases there is inability to persevere in a marriage where the patient is either a wife or husband. It makes the spouse to have mentality of trying to get their way out. This is attributed to effect in the sexual behavior and performance which is not at par or anyway near the satisfaction level achieved before. In chronic situations, it leads to dysfunctioning of the whole act as earlier stipulated as lack of interest or mood. In the recent past, it has been noted with keen interest that patients suffering from chronic depression pose a great burden o the family members and those destined to take care of them. What this implies is that the care givers have to reduce the time the have to undertake in doin g their personal activities such as leisure and other social activities after their relative has been diagnosed with depression. The family will tend to be more worried about the future with increased symptoms, effects and consequences. The effects are more staunch in families with poor base are compared to their rich counterparts. The community as whole participates in the sense that support can easily be mobilized from the social networks. The support can either be financial or just moral. Handling of depressed patients has effects as well. Parents of children with depression are reported to have a higher likelihood of contacting or suffering from psychological disorders such as the same mental depression. Thus children require more attention compared to adults. Therefore the risks in handling children is much greater compared to adults Educational support has been advanced on that note that is found capable of assisting relatives in provision of care to patients suffering from ch ronic depression. Although sources indicate that the much that has been advanced is too little and a further research is recommended. Such education is technically referred to as psycho education and it was purposely developed to assist in mitigation of the enormous difficulties and challenges encountered by

Financial Cost of Corporate Fraud in United States Essay

Financial Cost of Corporate Fraud in United States - Essay Example However, the study reveals that fraud training for employees and managers reduces the risk of fraud by 52% and 56% respectively (ACFE, 2009, p.37). Thus, ethical training may be employed as a control against fraud. However, this may not be adequate and other controls must be put in place for early detection of fraudulent activities. Financial statement fraud is the biggest category of frauds and the one associated with highest losses. Financial statements from different periods can be used to identify red flags, which may provide an idea that fraud may be occurring or a deviation from normal routine. Some of these components from financial statements are described below: Receivables can be booked fictitiously or increased without underlying trade/ transaction to show an overstated balance sheet and asset position. The management may want to show better results for the year, and thus may be tempted to overstate receivables. This was carried out recently by the CEO of Satyam, an Indian IT outsourcing company. He recorded receivables against selling to fictitious companies, and thus inflated the balance sheet. This type of fraud can be identified by carrying out the year to year analysis of changes in receivables, and their collection days.

Christopher Columbus Evaluation Essay Example for Free

Christopher Columbus Evaluation Essay Who was the navigator, colonizer, and explorer extraordinaire that fearlessly journeyed the seas and â€Å"discovered† the great â€Å"New World†? It was Christopher Columbus, of course! However, in reality, Columbus didn’t actually discover the Americas. Rather, he traveled to an already-inhabited land with not-so-civilized inhabitants, and expropriated both the land, and the indigenous people. By doing this, he brought settlers from Europe, who helped take over the land, causing plenty of suffering and havoc, but also completing the map and transforming life for people around the world. Some believe he was a hero, and some believe he was a monster. However, one man’s gain is another’s loss in most cases. Columbus brought change, both good and bad, through his actions, which defined his character and personality. Columbus’s journey to the Americas sowed seeds of change and revolution for people all over the world. More people came to the â€Å"New World† to settle, and natives were brought to Europe, and more exotic tastes were introduced to both hemispheres; cattle, sugar, and pigs to the West, tomatoes, potatoes, corn, and cocoa to the East. New animals, especially the horse, changed everyday life for Native Americans, and written language spread the continent, replacing either a complicated system of hieroglyphics or nothing at all. Soon, people from all over the globe began arriving in great numbers, and the continent became a successful beacon of hope for many. Of course, with the up rise of some came the downfall of others. The indigenous people of the New World could not resist the conquistadors’ most devastating weapon: disease. Millions were wiped out by smallpox alone, and many were so ill that they could not resist the European conquest. The natives were not the only ones who suffered. Back in Europe, people started suffering from syphilis with the return of the conquistadors. Tobacco, its pleasures, and its deadly secrets were even more gifts to the Old World from the New. As the local population began to shrink, a new type of foreigner began to arrive in large numbers, the Africans. As agriculture-based economy began to spread in the Americas, so did slavery, and suffering for the Africans. Thus, the seeds of racial antagonism were sowed and still affect our society today. Christopher Columbus’s character and personality have long been debatable. Depending on how you evaluate his actions, he could either be a hero or a villain to you. Young students today are present with the image of a â€Å"largerthanlife† national hero. In some ways, he is. Without him, the American citizens of today might not even be here. However, it was inevitable that an outsider would stumble across this land and introduce their people to it, and the native people to a more civilized lifestyle. At the same time, the way that Columbus went about doing that was definitely inhumane. According to a journal entry from Columbus himself, dated back to 1492, he gained their trust and friendship just so that he could convert them and turn them into slaves. Not only that, but he took over a land that was already inhabited by people, tormented the people so much that there are not even 200 of the native population left today, and claimed that he was the first to sight the land. All this shows that he was very deceiving, unscrupulous, selfish, and definitely lacking chaste. In conclusion, Columbus’s conquest to the New World brought forth change, both for the better, and for worse, while his selfish personality showed through the whole time. Whether you see him as a hero or a villain, the collision of the New and Old worlds was inevitable, and his contributions brought forth a connection and world that we should all be very thankful for.

Building Materials Market in Vietnam

Building Materials Market in Vietnam This part of the research provides a deeper view on Vietnam building materials industry with concentration on the recent business situation of construction and building materials market. Information about building materials firms is also provided. 1.1 Construction and real estate Vietnam’s economy has gone through a struggling period of insubstantial credit expansion, because of the decelerated development in the banking system characterized by non-performing loans (NPLs) and a property market slump. The property market in Vietnam is currently disheartened, disputing with market conditions including a lack of capital resources have resulted in construction companies being unable to complete projects, while purchasers are finding it challenging to afford property because of a lack of access to loans. As a result, many construction projects, housing, apartments, etc. are being unfinished .There are also signs of distressed property assets in the country. Therefore the construction industry’s growth rate declined from 19.7% in 2011 to 6.5% in 2012, although the industry reached a Compound Annual Growth Rate (CAGR) of 19% from 2008 to 2012 (Timetric, 2013). The construction market in Vietnam is expected to be higher than average growth rates until the end of the decade (CB Richard Ellis Group, 2008 2013). Construction spending was approximately US$18.6 billion in 2012, which accounted for slightly under 20% of the country’s GDP. This spending is estimated to grow by nearly 7% per annual over the next five years (Savills, 2013). In Vietnam construction market, the residential sector made up the largest proportion of more than half of total construction spending in 2012, followed by the infrastructure sector. The non-residential market constituted just about 10% of total construction spending in 2012. (IHS Inc., 2012) Currently, a mismatch between supply and demand in the Vietnamese property market has happened. Demand perseveres for affordable housing, office but construction developers of mid to high end assets are in difficulty to attract buyers or rental consumers. This table showed the existing and the new supply for office market in Vietnam. Chart 10: Existing and new office supply. Unit: sqm (000s) (Savills, 2013) In Cushman Wakefield Market outlook 2013, it stated that current average rents for Grade A in Vietnam have decreased by 46% and 41% in HCMC and Hanoi respectively, compares to 2008. Meanwhile the total value of inventory in housing projects was estimated at more than VND125 trillion (US$6 billion) in 55 cities and provinces in May 2013. High real estate prices and over-supply, which have rocketed due to speculative activities at the peak of the market, are serious problems. They resulted in rental rates declined during the recent years with average rents throughout all grades falling by approximately 2% quarter-on-quarter (DTZ Vietnam, 2012). Contractors are holding on a lot of purchased real estate products at relatively high prices and are unwilling to sell at a loss price throughout the current downward trend. In many reports were submitted to construction firms and Vietnamese government, they all advised to address the over-supply issue, adjustments to the apartment size and lev el of development are necessary. In Asia Construction Outlook by AECOM in 2013, they forecasted that all major sectors in Vietnam would grow over the next five years at similar rates. Specifically, total construction output of Vietnam would be at around $18.5 billion till 2018, with the growth rate of about 6.7%. Infrastructure investment, such as highways, rail and ports, will be a main growth area until the end of the decade. However, the government is likely to have limited capacity for funding much of this because it is likely to be constrained by public debt levels. As a result Vietnam is set to offer significant opportunities through privately financed infrastructure projects, with the funding likely to take the form of foreign direct investment or PPP joint ventures. Geographically, the large amount of the investment will be focused on Hanoi, Ho Chi Minh and the North-South corridor in between. 1.2 Building materials market 1.2.1 Characteristics The companies In Vietnam building materials industry, almost top manufacturers are state-owned. See the table 3 and 4 below for the top building materials firm in Vietnam according to VNR500: Table 3: Top 12 biggest building materials firms in Vietnam Rank Company Type Products 1 Ha Tien Cement JSC State-owned Cement 2 Viglacera Corporation State-owned Tiles, Building Glass, Sanitary wares, AAC, bricks 3 Cement Holcim Vietnam Joint Venture Cement 4 Nghi Son Cement Joint Venture Cement 5 Chinfon Cement Corporation Joint Venture Cement 6 Vincem Hoang Thach Co. Ltd State-owned Cement 7 Vincem Bim Son JSC State-owned Cement 8 Vissai Group Private Cement 9 Phuc Son Cement JSC Joint Venture Cement 10 FICO JSC State-owned Cement 11 Phu Tai JSC Private Stone, Tiles, Wood 12 Vincem Hoang Mai JSC State-owned Cement Note that the joint venture companies above are among state-owned companies and foreign investors. Table 4: Top 12 biggest private building materials companies in Vietnam Rank Company Products Note 1 Vissai Group Cement 2 Phu Tai JSC Stone, Tiles, Wood 3 Quangninh construction and cement JSC Cement Sub-company of SOE 4 Prime Vinh Phuc Company Tiles 5 Vinh Tuong Industrial Corporation Ceiling, drywall grid 6 Song Gianh Cement Co. Ltd. Cement Sub-company of SOE 7 Viglacera Ha Long JSC Terracotta tiles Sub-company of SOE 8 DIC Intraco JSC Steels, AAC, Wood, Roof tiles, Klinkers Sub-company of SOE 9 Le Phan Construction Co Ltd Concrete 10 Vicostone Stone 11 Prime Dai Viet JSC Tiles 12 Tay Do Cement JSC Cement Sub-company of SOE As you can see from the above tables, the state-owned building materials companies account for large proportion in the industry. They also are the dominating factor in private sector, it has created bad business environment in Vietnam due to incentives that SOEs have received. Therefore, they do not have very active domestic rivals who put pressure on them to innovate. Regarding to types of products, it is seen that cement is the top priority in the industry. 10 out of 12 biggest manufacturers are producing cement and cement related products. This sector has contributed a large ratio in export activities of Vietnam (see table 9). However, nowadays, tiles sector attracts more attention of government because of this sector’s importance on the global market. Vietnam ceramic tiles sector was ranked in the top ten countries of manufacturing and exporting tiles (Stock, 2010). 1.2.2 Domestic performance As stated in above part, all 3 main sectors of construction and real estate (residential, infrastructure and non-residential) has been struggling in the ability to complete their projects. Not only that, the economic crisis led to high inflation, tightened credit expansion, and lower spending of people. It made people less likely to buy, or rent a new house or even fix or upgrade their house. Therefore, the building materials market of Vietnam has also suffered a serious downward trend in development. Regarding ceramic market, according to reports and articles from Vietnam building ceramic association (VBCA) in 2013, the amount of manufactured tiles was slightly under 70% of total capacity, estimated around 289.8 million square meter. This number is much lower than 375 million square meter in 2010 when Vietnam was ranked the 5th on top manufacturing countries over the world with 3.9% on the world production (Stock, 2010). Stock of tiles that was difficult to clear, was approximately 50 days of production, about 40 million square meter or 112.800.000 USD. On the other hand, sanitary ware products were produced nearly 70% of total capacity, assessed at 9 million units, and number of units in inventory hit an average of 50-60 days of production, about 1.2 million units or approximately 28.200.000 USD. Table 5: Total consumption for tiles and sanitary ware of Vietnamese manufacturers. 2007 2008 2009 2010 2011 2012 Total domestic consumption volume Tiles (million sqm) 150 203.65 297.5 290 272 246,9 Sanitary ware (million unit) 7.5 7.8 9.0 9.7 9.3 8.5 (Vietnam Ceramic Business Association, 2013) As we can see from Table 5, the volume of domestic consumption for tiles and sanitary ware started to decrease significantly from 2011, since Vietnam stand in its own recession. Before this year, the world economic crisis obviously had no negative effects on the local market because the amount kept raising until 2010. Table 6: Total tiles (ceramic and porcelain) in stock of some Vietnamese manufacturers No. Company Max Capacity (million sqm/ year) Actual Capacity (million sqm) In Stock (million sqm) 1 Mikado 1.5 1.07 0.1 2 Viet Y 1.8 1.30 0.25 3 Granite Trung Do 3.5 2.43 0.4 4 Prime 99 74 5.5 5 Catalan 15 10.5 1.3 6 CMC 5 4 0.3 7 Vinh Thang 9 6.5 0.6 8 Vitaly 4.5 2 0.3 9 Thach Ban 2 1.2 0.2 10 Toko 15 10.5 2 11 Viglacera 25 20 2 (Vietnam Ministry of Construction, 2013) From Table 6, it is clearly seen that those 11 manufacturer of tiles in Vietnam did not reach the maximum target capacity of them, and also had a large quantity of tiles in stock which is very difficult to clear. Regard to building glass products, Vietnam has 7 companies producing over-size building glass with maximum capacity is over 150 million square meter. However, in 2012, the goods in stock was approximately more than 60 million square meter of standard glass. It slightly equaled 4 month capacity of all manufacturers. Moreover, in that 60 million, there was 57 million meter of float glass, respectively 5 month production output. Besides that, imported glass from China and ASEAN countries with lower price also impacted on Vietnamese firm’s consumption. Therefore, some factories had to temporary stop producing for a while, for instance, Viglacera Dap Cau glass factory was closed from middle 2012 to September 2013 due to oversupply. In 2013, consumption of bricks and roofing tiles experienced a 70% of overall capacity. The actual produced quantity of brick was estimated of 17 billion units, but the purchased quantity just reached 14 billion bricks, about 80%. Table 7: Bricks manufacturing capacity and consumption in 2012. Product Maximum Capacity Actual output Consumption Factory standard brick 14 billion 12 billion 10 billion Manual brick 6 billion 5 billion 4 billion Total 20 billion 17 billion 14 billion Unit: brick. (Vietnam Ministry of Construction, 2013) A new kind of brick (or block that is non-fired) which was started to produce in Vietnam not long ago, is Autoclave Aerated Concrete (AAC) blocks. It also has been struggling with output clearance because of low demand in construction, especially no new projects tend to implement this kind of brick. Beside the unstable quality, lack of synchronous building solution also one of the stand-out issues. Therefore, there was not many construction contractors in Vietnam using this building material. As a result, consumption of AAC is limited, it reached just around 60-80% of total capacity and some fresh-built factories are facing perfunctory production or threat of bankruptcy. However, according to non-fired products development program of the government, the prime minister signed the decision that AAC will replace 30-40% traditional bricks, and it is mandatory for building higher than 8 floors. So, with this policy the future of AAC in Vietnam is valuated as brightest among other material s. Table 8: Vietnam AAC Factories production and consumption in 2012. No. Company Location in Vietnam Capacity (m3/year) Actual Consumption (m3) Total 9 factories 1.500.000 1 Viglacera AAC Bac Ninh 200.000 150.000 2 Vinema Ha Nam 100.000 60.000 3 Song Da Cao Cuong Hai Duong 200.000 100.000 4 Phuc Son Hoa Binh 150.000 90.000 5 An Thai Phu Tho 300.000 240.000 6 Truong Hai Hai Duong 200.000 110.000 7 Vinh Duc Lam Dong 100.000 50.000 8 Vuong Hai Dong Nai 100.000 60.000 9 Ky Nguyen E-block Long An 150.000 70.000 (Vietnam Ministry of Construction, 2013) Concerning cement market in Vietnam, it has been even worse than other materials. Due to government policy on lowering inflation, stabilizing market price and macroeconomic, from 2008 to present, cement price just increased about 30% while input materials, coal price raised 4 times. In addition, electricity, fuel price also rocketed continuously. Moreover, from 2010, the exchange rate between VND-USD rose and the access to banking credit was difficult, so cost over cement price jumped up 20-30%. According to Vietnam Cement Association, total cost of manufacturing is 60% of selling price, exchange rate increased, loan interest is about 20%/year, almost all cement companies in 2011, 2012, 2013 suffered losses. For example, Cam Pha and Ha Long cement factory had accumulated debt of 1200 billion VND (about 56 million USD) and 1090 billion VND (51 million USD) respectively. Reports of Vietnam Cement Association said 48 million tons of cement was manufactured in 2012, the number decreased 5% compared to that of 2011. Domestic consumption recorded a figure of 40 million tons, around 18% of decline. The designed capacity is approximately 70 million tons, but the actual production just hit 52 million tons (72% of capacity). Vietnam steel and metal industry has stayed in the same situation. However, the troubles are not only oversupply caused by frozen construction sector, but also the limited capital, numerous debt from loans, raw input ingredients relied on importing sources, out-of-date production technology. All of those reasons led to weak competitive strength on its own home-market. According to Vietnam steel association’s 2013 report, about 30% of Vietnam steel manufacturers were using old technology, more than 40% with average technology, and just less than 30% of steel firms had new technology for production and management. Moreover, 2013 growth rate was 7%; total capacity reached 10 million tons, 8.5% y-o-y growth but the actual domestic consumption poorly hit 1/3 of capacity. In summary, Vietnamese building materials companies have been endeavoring to find solutions to overcome domestic crash since crisis happened. Although the government provided some supporting actions for the sector since 2011 and then ratified $3.3 billion economic package in early 2014 (Dieu Tu Uyen, 2014), the building materials industry seems to be difficult to recover. In 2013, there were 10077 construction and real estate companies went bankruptcy, while other firms were struggling in tackling the oversupply issue. 1.2.3 Export international business situation Due to the difficulties of local market, many companies have tried to enhance exporting activity. However, the majority of products is still mainly used for consuming inside the country and export’s profits could not cover the losses of domestic sale. It happened to all kind of building materials. In general, export turnover of building materials in 2011 hit slightly over 766 million USD, that was an 86.45% increase compare to 2010. See the table below: Table 9: Export turnover of building materials in 2011 and percentage of increase. No Type of building material Turnover (thousand USD) Percentage of increase (%) 2010 2011 1 Building Stone 105.646 131.715 24.67 2 Tiles 109.656 185.144 68.84 3 Sanitary ware 46.481 64.343 38.42 4 Glass 40.135 49.027 22.15 5 Clinker and cement 96.887 319.101 229.35 6 Raw materials 12.027 16.682 38.70 Total 410.832 766.012 86.45 Regarding building stones, top ten companies accounted for more than 66% of total exporting revenue of stone. The top consuming markets of Vietnam stone are Belgium (29.21%), Australia (13.38%) and United States (9%). Referring to ceramic products, just about 15% of total manufactured goods was exported. Top ten companies constituted 56% of total revenue, and the biggest markets are Laos, Taiwan, Thailand, Cambodia, etc. Besides that, tiles and sanitary ware have been imported with lower price than Vietnamese firms, most of them come from China. It has pushed domestic manufacturers to face high pressures and challenges in selling products in the country market. Table 10: Import and Export situation of tiles and sanitary of Vietnam. Consumption 2007 2008 2009 2010 2011 2012 Export (million USD) Tiles 77.16 80.88 69.57 109.66 185.14 190 Sanitary ware 35.7 41.3 37.4 46.5 64.3 65 Import (million USD) Tiles 33.65 22.4 70.16 95.5 46.4 46 Sanitary ware 4.2 6.8 6.7 8.07 12.54 12 (Vietnam Ceramic Business Association, 2013) According to top exporting countries of ceramic tiles, Vietnam was ranked the 12th with 28 million square meter exported in 2010, that accounted for 0.3% and 1.5% on the world consumption and the world export respectively (Stock, 2010). However, in terms of money, the total value of exported tiles of Vietnam is much lower than Thailand and Malaysia (not mentioned China here). The Vietnam Association for Building materials A said that the reason is because the competitive strength of Vietnamese firms is lower than Thailand, Malaysia, and China. Regarding to glass, total value of glass and glass related products was $0.54 billion in 2012. It was a 46.7% rise compare to 2011. However, because of the domestic downturn, this increase could not cover the loss in glass sector. For example, Mr. Nguyen Anh Tuan said in the interview that Viglacera Corporation still had to close their glass factory in the north for more than 12 months in spite of having foreign customers. About cement sector, in the last 10 years, Vietnam cement generally had the lower selling price than other countries in ASEAN. It stayed at around $50/ton, while the ASEAN average cement price fluctuated from $65 to $75/ton (Vietnam National Cement Association, 2013). In 2012, exporting volume levelled up to 1.7 million tons of cement and 7.3 million tons of clinker. After that, in 2013, total cement and clinker exported increased to nearly 14 million tons. This was a big leap in Vietnam cement industry on international business. It is clearly seen that building materials products such as tiles, sanitary ware, glass, cement, or steel have had a stable increase in export. However, these improvements could not help to overcome the downward trend in domestic market. According to building materials business community, the ASEAN market is considered as similarities and has strong points for Vietnamese companies to expand businesses. So, most of building materials manufacturers in Vietnam has focused mostly on this areas. The imposed tax for goods from Vietnam is 0%, but the technical barrier and quality is highly required. Especially, ASEAN countries also strictly control and apply the anti-dumping policies. Together with the competition with China, it makes the profits of exports stay relatively small. However, if Vietnam succeeds in signing the Trans-Pacific Partnership agreement, Vietnamese firms will have greater chances to expand their business into different nations outside ASEAN. Currently, Vietnam companies are paying import tax for members of TPP such as Mexico 25%, Chile 6%, Peru 5%, etc. Therefore, when Vietnam joins TPP, import tax equals 0%, companies will have more incentives to exploit these potential markets. This also true for other trade agreements Vietnam is negotiating. 1.3 Conclusion The financial crisis did have an extremely negative impact on construction and building materials industry. Factories had to cut down their capacity around 30% in general. The goods in stock increased and was difficult to sell, especially for tiles sector. Many companies went bankrupt, some have to close their factories, and many of them suffered losses. The export volume and value of building materials products have kept rising recent years. However it can not cover the huge losses in domestic market. On the other hand, the state-owned enterprises have dominated the sector over the private companies.

Supplier Relationship Management In Todays Increasing Economic Environment Business Essay

Supplier Relationship Management In Todays Increasing Economic Environment Business Essay Abstract In todays increasing economic environment, organisations are looking for new techniques to improve their competitive advantage. The focus of my research is in the area of purchasing which have now become a strategic function and a key reason in positioning competitively among all other competitors. The paper discusses that in recent years, the relationships between buyers and suppliers have been continuously receiving a considerable attention for effective operations within organisations. Traditionally, supplier-buyer relationships were regarded as adversarial, arms length transactions. However, the approach towards managing this relationship is changing and moving towards a more collaborative approach due to the fact that now suppliers are important sources to gain competitive advantage to operate in global markets in terms of their expertise, knowledge and ability of sharing risks. [Research paper Journal] The research aims to provide an understanding of supplier relationship management, factors of supplier evaluation and selection process, and the elements that contribute to the establishment of a productive customer/vendor relationships. Such a study is important for buyers to build and maintain effective relationships with their suppliers for consistent cost reductions while working together to mutually create revenues and other benefits. The paper recommends that this information may work as a reference guideline for buyers when initiating cooperative relationships with their supply sources resulting in advanced purchasing and strategic supply chain management in their organisation. The research method adopted in this dissertation is secondary exploring various business journals, business websites, textbooks and articles. Due to continuous new product developments, product innovations and increase in costs, managing supplier relationships will further become crucial in the near future. Due to this reason, therefore, this paper discusses the requirement of supplier relationships and how this shift in organisational strategy towards building relations has and will going to change the employees role, companys processes and organisational goals. The findings from this research provides an evidence of how companies have improved their supply chain operations through understanding the importance to develop effective supplier relationships as part of their core business activity for not only to achieve success within procurement department but also to successfully complete other supply chain cycle such as maintaining production flow at all times, planning accurately, inventory handling, logistical issues and achieving financial benefits. Examples included findings from large organisations of Hong Kong, Rolls Royce, GE, and Japanese firm Toyota. The main conclusion that can be drawn from this research is that every organisation must emphasise the need to actually develop world class suppliers that helps in building long-term relationships, reduction in costs, improved QCDS (quality, cost, delivery and service) criteria, improved customer service, mutual information sharing, reducing the NPI (new product inspection) costs and becoming world class organisation in the market. Introduction Nowadays, the majority of Organisations believe that their companys real assets are embedded in the quality of the relationships shared between the business and their stakeholders such as clients or customers, employees and suppliers. Developing and managing supplier relationship will be the main subject throughout this project. The objective of this research is to investigate the importance of the need to focus more on building collaborative relationships with their strategic suppliers by large manufacturing companies. With increase in globalisation and restructuring of several organisations, procurements role has changed focusing more towards costs, quality, flexibility and technology. [Herbig and OHara, 1995; Goh and Lau, 1999] In the previous years (traditionally), purchasing was considered as a secretarial function in which the buyer-supplier relationships were viewed as being adversarial and unsurprisingly results in a win/lose outcome. Before, business operations from manufacturing to assembling the finished goods were prepared in-house but now many organisations have moved towards a more combined approach where manufacturing firms have started concentrating more on their core competencies only and rest outsourcing nationally and internationally to satisfy their customer expectations. Organisations are going lean i.e. working towards continuous improvement, adopting just-in time and total quality management and eliminating wastes. This highlighted the requirement for most of the lean organisations to grow cooperative supplier-buyer relationships to achieve real productivity, improved design and quality that are unattainable unless the supplying partners assist in product innovation. Hence, several manufacturers have recognized their ability to become world class competitors based on establishing high levels of trust and cooperation among their suppliers. [They and Briggs (1994)] For example, highlighting the case of Rolls Royce, the engine manufacturer, that outsources 70% of their material from external supply chain and thats the reason Rolls Royce try to encourage their suppliers to work openly and jointly contributing to their performance. Rolls Royce belief in building good supplier relationships assures quality and competitiveness to their product offerings and helps to achieve customer standards. The growing face of domestic and global competition has led to understand the manufacturing companies to practise global sourcing which is a strategy to improve companies competitiveness in the international market through reducing costs, improving quality, increased exposure to universal technology, and improving delivery and reliability. A connection or association is known as a relationship. Relationships are said to be when individuals, organisations and internal or external groups to an enterprise interact. At recent times, relationship marketing describes long-term marketing strategy that emphasise on building and maintaining long-term relationships with customers rather than just focusing on one-time sale approach. At business level, relationship marketing is applied to variety of purchasing supplier relationships in the context of a broader network of interconnected purchasing, supplier and competitor organisations. Supplier relationship is defined as a systematic approach to supplier evaluation, selection and ongoing relationship management with the goal of cutting the costs of goods and services boosting profits. Supplier relationship management is a proactive approach of an ongoing business links to secure a competitive advantage within the organisation, focusing more on overall relationships between the supplier and the customer (buying organisation) rather than focusing on specific contracts. The idea is to develop trust and understanding of each others requirements and interests while providing assistance to each other. For example, Rolls Royce sends their experts to their sub-contract suppliers to improve their technology and performance standards. Such relationships bring profit and provide competitive advantage. [http://www.ogc.gov.uk/process_supplier_performance_and_contract_management_6368.asp] Today, most of the companies have realised that doing business jointly with their strategic suppliers will enhance their organisational ability to respond quickly to demand changes, focus on core business only and hence, results in implementing best practises. For example, Rolls Royce believes their supplier make very essential contribution to their business performance as over 70% of their manufacturing costs comes from external supply sources. focus more on their core competencies such as encouraging suppliers to work with transparency, openly and together to enhance continuous improvements. rather than Small to Medium size Enterprises and many local businesses use Transactional Purchasing whereas Large Enterprises use Relationship Purchasing to compete strongly in this economic climate. Transactional Purchasing Relationship purchasing Focus on short, discrete purchasing Focus on supplier retention Short-term orientation Long-term orientation Arms length Closeness Simple buyer-seller relationship Complicated, including internal relationships Emphasis on price, quality and delivery in the offered product No Innovation Emphasis on price, quality, delivery other factors, like innovative design as a collaborative exercise b/w purchaser and supplier Moderate supplier contacts High level of supplier contact with each contact being used to gain information strengthen the relationship Little sharing of information Significant sharing of information, including cost information and transparency Introducing Supply chain management The project is focused on process for choosing world class suppliers, importance of building supplier relationships, various supplier development approaches and process of negotiation required in purchasing that plays a vital role in todays supply chain management. Explaining what is supply chain management and its various elements that are necessary for the movement of goods and services within the business. Supply chain management consists of the intra and inter-organisational co-ordination of business functions that act as both transformative and support functions. This emphasises managing supply chain effectively must be a key activity within the businesses. [Mentzer et al. (2001)] Supply chain combines flow of materials, goods, and information (includes money) that floats within and between organisations linking with a variety of tangible and intangible facilitators, e.g. relationships, processes, activities and integrated information systems. Different views of supply chains are implemented in terms of a process when operations are emphasised, a logistical channel when emphasises marketing, a value chain whey looking at value added activities, and a demand chain when considering customer satisfaction. [Peck H. (2006)] Key elements of supply chain The key elements of supply chain are that links with each other by the movement of products. The following explains that supply chain starts and ends with the customer: [http://logistics.about.com/od/supplychainintroduction/a/into_scm.htm] Customer This is the customer that starts the value chain by deciding to make a purchase of a particular product for example, in an aviation industry procuring turbine blades or a fan shaft which is offered for sale by an organisation. At this stage, the customer contacts the sales team and places purchase order with a right quantity and delivered on a right date. If in case, this product needs manufacturing then the purchase order includes a requirement that must be fulfilling by the production facility. Planning The requirement for planning occurs when customers purchase order is received and processed with other existing orders. Production plans are created by the planning department to generate products to accomplish the customers order. If manufacturing requires, then raw materials are purchased to complete the process. Purchasing The list of materials e.g. raw materials and services is obtained which is required by the production department to complete the purchase order. Then purchasing team issues purchase orders to procure raw material from selected suppliers on their manufacturing site on a requisite date. Inventory The raw materials that are received from suppliers are checked for quality and moved into the warehouse. The invoice is received for the parts that are delivered by the supplier and then materials are stored until there is a demand from a production area. Production According to the production plan, the raw materials from the inventory are moved into the production area where product manufacturing takes place and creates the finished product. Once the parts are completed, they are again sent back to the warehouse and stored prior to delivery to the ultimate customer. Transportation Logistics department then finds the most efficient shipping method in order to achieve on-time delivery at the right date mentioned by the customer. After goods are received by the customer, an invoice is sent by the organisation (supplier) for delivered products. Outlining Case study: GE-Aviation In this project, there will be discussion on relationship purchasing within aviation industry considering GE Aviation as a case study. Suggesting methods of procurement and ways of maintaining GEs existing and new relationships with suppliers. On-line procurement is one of the major processes that I will be focusing in my project which GE adopts within their business that not only reduces the cost and saves time but also provides the right amount of communication with its suppliers at the right time. For example, GE-Aviation has its own department for RB211 jumbo jet engine where there are teams responsible for engineering, operations, purchasing and billing. The engine gets repaired and maintained on site. For RB211 engine type, GEs biggest supplier is Rolls Royce who is the OEMs and can provide material many times. Using SAP software within the whole organisation saves a huge amount of time for purchasing transactions and also makes easy for GE purchasing team to analyse demand raised and provide forecasting to their suppliers for each product by just looking into the system and working through its historical past. GE uses Relationship Purchasing in which they believe to maximise their revenue it is very important to have good supplier relationships. Some of the key approaches/strategies required before working towards building relationships are as follows: Selecting a world class supplier Companies that outsources internationally their materials opens the opportunity to identify potential suppliers, evaluate and reasonably short list them that result with the best supplier. This is considered as one of the most important process to perform by the procurement team that aims to choose the best supplier that ensures reliable supplies with low risk involved and maximises the overall value to the buyer. The following are the seven key steps involved in supplier evaluation and selection process: (Fig 7.5 Supplier evaluation and selection process [pg 163]) Recognise the need for supplier selection The first step is to recognise the actual need for selection of supplier. Purchasing team must work with new product development department in order to recognise future buying behaviours. Purchasing groups proactively select suppliers and anticipate demands rather than wait until a demand rises. The process to start this evaluation arises due to the following scenarios: Through new product development Poor performance received from existing internal and external suppliers Closure of the contract Procuring new tools and equipments Thinking to expand business into new markets or products Due to inadequate capacity of existing suppliers Throughout outsourcing and re-engineering analyses Deciding to reduce the size of the supply base Identifying the main sourcing requirements All the way through evaluation process, procurement team must keep an eye on what they are intended to do. Acquiring materials is not just important but also focus to meet specific requirements set by the other internal customer and indirectly by other supply chain members. For example, an aviation company like GE that makes engines has to buy all the machinery and spare parts along with buyers taking care to ensure a perfect quality products are delivered on time. Establishing sourcing strategy Developing purchasing strategies results in long term alliances that buyers look each time to compete in todays growing competition. Several vital strategic decisions that affect the selection of suppliers are: Picking single or multiple suppliers Creating short-term or long-term contracts Suppliers wish to develop working partnerships rather than arms length relations Working with suppliers that can provide support with product designs rather than those who cannot modify designs Having choice of local, domestic, foreign or global suppliers Therefore, sourcing strategies and policies must be carefully re-evaluated during supplier selection as requirements changes frequently in shorter times because of changing market conditions, changing consumer preferences and accustomed corporate goals. Identifying potential suppliers This stage identifies a list of suppliers that can actually have the capability to deliver of what is required by the customer. Buyers can use various numbers of sources to develop the preliminary list of supply sources by a quick search of company websites as well as long and detailed search for companies that can support with design and make specialised products. A rule of thumb must take place to determine the effort to be used into supplier selection by comparing the existing suppliers efficiency and strategic importance of an item because too much effort and expensive resources are wasted; too little effort and potential suppliers might be missed in this initial search criteria. Following are the sources of information widely-used to identify potential suppliers: Current suppliers Using existing suppliers who are already on the preferred list which are consistently meeting buyers requirements that reduces the purchasers time and effort in evaluation of supplier capabilities. But at the same time, existing supplier may not always provide the world class long term results and that is the reason why organisations scan information continuously to recognize potential new sources. Sales representatives and agents Marketing information received from these individuals can become a valuable source of information for new product offerings. Buyers keep this information in their file for future reference even if there is no urgent requirement for a supplier service. Internet searches Nowadays suppliers launch customer websites as part of their marketing approach and help the buyers with detailed information from a simple search of possible suppliers. Various other websites can also help in discovering and assessing important information like reviews, comparisons, comments, analyses and case studies of potential suppliers. Experience Experienced individuals working within purchasing team generally carries a wide knowledge about various capable suppliers as experienced buyers have already worked in a particular industry for many years and familiar with the main suppliers and their features. Internal sources Operating different business units within large organisations, each may have their own procurement department. Therefore, other units in the same organisation becomes a valuable source of information exchange to buyers through informal meetings, formal team sessions, an internal database, purchasing newsletters, etc. Limit suppliers in the selection pool At this stage, the procurement team must consolidate and analyse the information gathered on potential supply sources that helps them to make informed decisions. Getting a long list of suppliers is just the initial task but buyers then have to eliminate the weakest suppliers until they attain the strong shortlist. Therefore, the final supplier is then selected from this list. The following are the entry qualifiers features that influence buyers final decision [Howard (1998)]: Financial strength Appropriate business strategy Strong supportive management Proven manufacturing capability Design capability There are also many reasons that influence buyers decision to procure material on the following basis: Buying directly from the original manufacturer or distributor Original equipment manufacturers mostly offer lower prices that avoid the costs of wholesalers and retailers along with profit margins. The final choice must be considered on the basis of four factors including the size of the purchase, the manufacturers policies of direct sales, availability of storage at buyers facility, and the required additional services. Local, national, international and global suppliers Choosing international suppliers are more favourable as they usually offers the best price along with technical support but these have to be balanced by higher shipping costs, stocks, communication problems and common risks involved. Also, choosing local suppliers are considered more responsive to fluctuating demands, small deliveries and regular changes in purchase orders using Just-in-time method that not only supports local suppliers and allows the buyers to enhance local economy but also helps in building community goodwill. Large or small suppliers Usually buyers focus on suppliers capability to do the work rather than selecting on the basis of its size. But a buyer must keep in mind the unexpected increase in demands that can only be dealt by larger firms providing extra capacity to overcome these fluctuations. At the same time, in order to create a diversified supply base, buyers intentionally deal with smaller suppliers. Multiple or single sourcing When there are numerous different suppliers available then it becomes very difficult to make a decision of how many to use? Most of the organisations have chosen a trend to reduce the supply base that will benefit them accordingly. Determining method to select supplier This is the last stage where buyers are left with four to five suppliers in their shortlist and decide to evaluate these remaining organisations by looking at the alternatives in more detail for example, using supplier-provided information, supplier/customer visits, preferred list of suppliers and third-party information. Supplier-provided information Detailed information can be acquired through requesting price quotations. Information received from quotations are then used to understand the product description and supply which is then followed by another requests of a detailed cost breakdown of the price quoted by suppliers initially that must include the costs of labour, materials, overheads and profit as buyers also require operational details to finally evaluate them. Supplier visits One of the most efficient ways of getting an overall view of suppliers capabilities and performance is to visit suppliers facilities by a cross-functional team. Generally, these visits are expensive and time consuming so a buyer must balance their desire to gather as much information as possible confidentially. The following table shows important information points that a buyer must collect during its visit: Management capability Quality management Technology levels Planning and scheduling effectiveness Financial strength Personnel relations E-business capabilities Sophistication and efficiency of operations ISO certifications Skills, knowledge and experience of workforce Evidence of good management and housekeeping Types of inventory Nature of the goods inwards, stores and outwards areas Environmental practices Employee employment contracts Any significant changes planned or expected Contact details of key decision makers Use of preferred suppliers This is a list of suppliers created by the purchasers to reward their best suppliers that consistently meets their strict performance criteria. The list can also be used as an incentive to improve the existing suppliers performance and assessed accordingly. External or third-party information This consists of all the other information available about a potential supplier. For example, Total quality management is a system that insists suppliers to meet the quality standards as similar to buyers and generates a flow of related information throughout the supply chain. Selecting supplier and signing agreement This is the final step to choose the supplier followed by signing a contract. This includes different purchasing orders required for routine and major items, i.e. using standard purchase orders for routine items whereas, detailed negotiation is required to agree on specific details for major items that increases the complexity in the purchase order. Supplier evaluation criteria After considering various steps in selecting suppliers, the buying organisation must analyse the following questions with the supply organisation in order to progress outside their traditional purchasing relationships and possibilities for long term relationships with them: [Spekman (1988)] Has the supplier signified a dedication or willingness for a longer term relationship? Is the supplier enthusiastic to perform resources to develop this relationship? Is the supplier willing or able to participate at the early stage or throughout the stage of product design? Has supplier brought any unique service to the business? Is the supplier showed their interests or commitment towards customers problems and effectively solving them together? Is the supplier is interested in improvements and innovations in the operations? Is there any openness of sharing and exchanging information between both companies? How much knowledgeable is the supplier about the customers industry and business? Is the need for confidentially exchanged information taken seriously? Supplier management and development In todays time, the need to improve supplier performance is open in large or small organisations and for this reason; the purchasing teams must introduce a supplier relationship management (SRM) approach to achieve their organisational goals and success in global purchases of technology. Therefore, this calls for managing resources efficiently throughout supply chain collaborations, dedication required from supply managers, creating standardised best practices effectively and tools required for tracking and evaluating the results. The process must begin with effective supplier performance measures required to undertake strategic supply or procurement decisions for the organisation. [Minahan T. And Vigorose M. (2002)] Effective supplier performance measurements What to measure The factors important to assess the performance includes: Delivery performance The purchase orders that are sent to suppliers involves all the appropriate information on deliveries, with quantities, lead times and due dates. Therefore, it is buyers responsibility to check regularly that how well a supplier actually meets their expected conditions. Cost performance There are many ways that can measure cost performances for example, monitoring real price delivered by the supplier after adjusting increase in the prices (inflation). Quality performance In order to measure quality, the best criteria for buyers is to check that products are delivered in 100% perfect condition with no defects. This also includes comparing previous performances, latest performance with mutually agreed standards and various other figures. Other qualitative factors in supplier performance Factor Explanation Problem solving Suppliers attention to provide solutions to the problem Technical skills Comparing suppliers manufacturing capacity with other business suppliers Reporting progress Suppliers incomplete reporting of existing problems and identifying and communicating other potential problems Corrective action Suppliers timely response to requests for corrective actions and requests for changes Cost-reduction plans Suppliers enthusiasm to find techniques that helps to reduce the total purchase cost New-product development support Suppliers capability to reduce time and cost required for new product development Buyer/seller compatibility Rating subjectively how well a purchasing firm and a supplier work together Therefore, the above are various other factors that help the buyers to measure the suppliers technical ability and closeness of both parties relationships. Reporting frequency This includes preparing reports to provide a clear feedback to supplier on their performance. Purchasing management must communicate with their buyers to send these reports by reviewing them weekly, monthly, quarterly or annually which is then followed with more face-to-face team meeting that reviews their actual performance, discussion on targets, identify potential improvements, examine changes, and so on. Any problems (for example, supplier fails to meet the required standard) occurred during crucial time must be addressed with special reports and meetings to avoid any financial and operational problems. Use of measurement data Procurement staff can make use of data collected from its measurement systems in many ways including: Identifying suppliers which are not meeting the performance goals and highlighting areas that calls for improvements, followed by corrective actions taken to raise the performance to acceptable levels or else finding new suppliers. It helps in discovering excellent performances achieved from supplier which then helps identify preferred suppliers that qualify for long term alliances. It also recognises the worst performing suppliers that are continuously not improving and needs to be removed from supply base whereas offering more work to superior suppliers. Supplier measurement techniques There are three techniques discussed for evaluating performance of suppliers, each differs in their use, level of subjectivity, resources required and implementing cost. Categorical techniques These techniques considers a particular aspect of performance, for example lead time and classifies a set of categories for performance rating as excellent, good, fair or poor and therefore, helps buyers in deciding which supplier is good or bad. This is an easiest system of measurement, easy to use, comparatively inexpensive and also the most subjective. There are some drawbacks of using this technique as they do not provide a clear analysis of performance, slower than automated systems and regarded as the lowest of the three techniques in terms of reliability. Scoring model This method overcomes the subjectivity of categorical technique by calculating a weighted score for different performance categories. This is more reliable and requires reasonable implementation cost providing flexibility for buyers to change the categories included as well as weights allocated to each. Cost-based techniques -This technique is the most comprehensive that can help the buying organisation to look for the total cost required for doing business with a particular supplier by identifying the lowest purchase price is no