Reference no: EM131502292

How can the expectations of supply differ for private versus public organizations? Services versus goods producers?

Public organizations include all levels of government these can range from federal, municipal or state. Public organizations provide services to people such as national defense, education, health care, transport, and so on. Public organizations use public funds which means these types of organizations must be more transparent and follow more rigorous processes.

The private sector does not have this requirement as they do no need to disclose business information. Public organizations must follow regulatory requirements.

Private organizations identify their supply source based in merits and will look at factors other than lowest price. Private organizations will do this because a more reliable and quality based supplier can sometimes perform better than the lowest price supplier.

The largest share of the expenditure for service producers are focused on resale requirements. Whereas, for goods producers, the largest portion of spend with suppliers is on direct requirements such as materials and parts. Depending on whether the organization is focused on goods or services it determines how the organization will orient its business.

I personally work at an aerospace and defense company and it truly has different processes than a private organization. Our company requires us to log exactly how many hours we are working on a project and what project we are working on.

The government has strict regulatory requirements which requires us to report to them exactly how we are spending the government's money.