1)Routine products: This quadrant represents significant

opportunity.
 The focus is on reducing the number of parts and the number
of suppliers.
 The aim is to reduce administrative and logistics complexity.
 The time saved here is used to focus on strategic suppliers and
bottleneck suppliers.
 The focus is on moving to system buying rather than
component buying.
 the purchasing department should not waste its energy on
small items.

Leverage products: This quadrant consists standard products.

These items provide an opportunity for leveraging buying power
low-supply-risk situations.
In these supply markets, there are a large number of suppliers and
switching costs are low.
So firms should be aggressive in their attempts to encourage
competitive bidding in order to leverage their position.
Most of the benefits obtained by firms in reverse auctions have
been in this category.

Strategic products:
 This quadrant represents high-value products with high supply
risks.
  Items in this quadrant are treated as strategic items, and a firm
must work towards establishing collaborative, long-term
relationships with suppliers in this quadrant.
 Firms must create opportunities for mutual cost reduction by
working together on all aspects, including product design.
 Because fewer parts and suppliers are involved, firms can
invest in building collaborative relationships.
 The top management of firms should get actively involved in
devising a strategy for this category of items.

These items represent relatively low value, but a firm is vulnerable

on this front because of the supply risk inherent in this market.

Here, the focus is on securing supply, and a firm should actively keep
looking at alternative sources of supply.
If possible, the firm should also look at substitutes that are from
low-risk supply markets.

For example, in the diesel fuel system, there may not be too many
suppliers of the required capability and competence.

2)Supplier Selection and Contract

Negotiation
Selecting the right suppliers makes a major difference to the cost and
quality
of your firm’s products and services.

Getting the best value for money involves achieving the right balance
between
cost and factors such as quality, reliability and service.

Following steps are recommended for efficient Supplier Selection

and
Contract Negotiation.

3)
1. Formaulate supplier management plan
2. List supply priorities

3. Identify potential suppliers

4. Draw up a shortlist

5. Choose a supplier
6. Negotiate the deal

7. Agree the contract

8. Build a relationship

4)
Supplier development strategies can result in significant
improvements in supplier performance, including
Reducing product defects by 5 - 90%,

Improving on-time delivery by 6 – 15%,

Reducing order fulfillment cycle time by 30 – 80%,

Improving product performance by 10 to 30%

Not all supplier development initiatives are successful – in fact, as

many as 50% are not
successful, due to poor implementation and follow-up.

Reaping the benefits of global sourcing and supply chain

management.
Benefits include:

Reduction in cost. Overseas suppliers often charge less money for

their goods, so you’ll see
an immediate reduction in spend.

Innovative ideas. Interacting with new suppliers can bring fresh

ideas to the table, which
can help, particularly if your company has been in a rut as of late.

Capacity. Many domestic suppliers can’t keep up with demand.

Depending on your
business’s nature, our post-COVID world has been demanding
certain products, and
domestic suppliers have been falling behind.

Better quality. In actuality, many overseas suppliers provide better

quality than some
domestic suppliers. As always, vet new suppliers and take detailed
notes about each one in
your supply chain management
Less waste. Many overseas suppliers have become more eco-friendly
and use sustainable
products for shipping.

5)the functions of stores can be classified as follows:

(a) To receive raw materials, components, tools, equipment and
other items and account for them,
(b) To provide adequate and proper storage and preservation to the
various items,
(c) To meet the demands of the user departments by proper issues
and account for the consumption,
[d) To minimize obsolescence, surplus and scrap through proper
codification, preservation and handling,
(e) To highlight stock accumulation, discrepancies and abnormal
consumption and
evolve effective control measures,
(f) To ensure good housekeeping so that material handling, material
preservation, stocking, receipt and
issue can be done adequately, and
(g) To assist in verification and provide supporting information for
effective purchase action.

6)Stores Systems and Procedures

Management of Receipts:
a. Management of Receipts: The inputs into stores or receipts can
emanate from internal as well as
external sources. The procedures start even before the material
reaches the stores when a Purchase Order
(PO) is placed on the vendor. In certain organisations, the stores and
purchase activities are bifurcated,
but care should be taken to ensure close coordination. The details
should be maintained in a
chronological order to enable the ease of understanding. The scope
of work involves following
functions:

a) Requirement determination,
(b) Raising purchase requisition,
(c) Chasing purchase orders to expedite supplies,
(d) Scheduling arrival of materials,
(e) Receiving the materials physically and planning for storage,
(f) Quantity & quality inspection,
(g) Checking input documents like invoice, lorry receipt, delivery
challans, invoices etc.,
(h) Taking stock of material received and of rejected material,
(i) Endorsing the suppliers bills and quantities and forwarding for
payment to accounts,
(j) Provisional goods inwards in case of later inspection,
(k) Final goods inwards in case of final acceptance of goods,
(1) Informing indenting departments of arrival of goods,
(m) Sending paperwork to purchase accounts for payment,
(n) Updating insurance paperwork for latest goods arrival, and
(o) In case of demurrages, arrange for insurance company visit.

Issue Control:
We now come to the stage namely, issues. Issues can be further
divided into issues to
consuming departments, and issues to outside suppliers for
processing or conversion.The first aspect is the control of issues.
Issues are based on scheduling of project. The second aspect is
delegation of authority.
unit, we are concerned only with the first aspect. The scope of this
issue control involves
the issue of the right material, in the right quantity, to the right
personnel, at the right time and place on receiving the right
authorisation, maintaining the records for the same.
Stores Documentation:
Documentation: All the documents received or generated inhouse
should be properly
categorised and a numbering system should be developed for proper
storage and quick retrieval. Besides
the receipt and issue documents, some other methods of
documentation necessary are given below:

(a) Bincard or kardex,

(b) Stores transfer voucher (from one store to another),
(c) List of slow moving/fast moving/obsolete items,
(d) Scrap disposal,
(e) Rejection notes,
(f) Acceptance notes,
(g) Delivery notes,
(h) Travel requisitions,
(i) Tour and expense reports,
(j) Indents,
(k) Codification methodology, and
(l) Material requirement planning.

7)The standard procedure for stock verification is as follows:

1. Prepare a program of verification.

2. Receive approval from the appropriate authority.
3. Appoint the verification team.
4. Provide the verifiers with a timetable and stock-taking sheet,
which is
usually serialized and dated.
5. Record notes and other details on the stock-taking sheet with the
help of
available documents.
6. Physically check and verify stock.
7. Note any discrepancies.
8. Value the stock.
9. Despatching the necessary certificates.
10 Submit reports, and recommendations.

9)BENEFITS OF VALUE ANALYSIS

i. Improvement in Product Design:
It leads to improvements in the product design so that more useful
products are given shape. Now in case of ball points, we do not have
clogging, there is easy and even flow of ink and rubber pad is
surrounding that reduces figures fatigue.
ii. High Quality is maintained:
High quality implies higher value. Thus, dry cells were leaking; now
they are leak proof; they are pen size with same power. Latest is that
they are rechargeable.
iii. Elimination of Wastage:
Value analysis improves the overall efficiency by eliminating the
wastages of various types. It was a problem to correct the mistakes.
It was done by pasting a paper. Now, pens are there and liquid paper
is developed which dries fast and can write back.
iv. Savings in Costs:
The main aim of value analysis is to cut the unwanted costs by
retaining all the features of performance or even bettering the
performance. Good deal of research and development has taken
place. Now milk, oils, purees pulp can be packed in tetra packing
presuming the qualities and the tetra pack is degradable
unlike plastic packs.
v. Generation of New Ideas and Products:
In case of tooth brushes, those in 1930’s were flat and hard, over 60
to 70 years brushes have come making brushing teeth easy, cosy and
dozy as it glides and massages gums.
vi. Encourages Team-Spirit and Morale:
Value analysis is a tool which is not handled by one, but groups or
teams and an organisation itself is a team of personnel having
specification. A product is the product of all team efforts. Therefore,
it fosters team spirit and manures employee morale as they are
pulling together for greater success.
vii. Neglected Areas are brought under Focus:
The organisational areas which need attention and improvement are
brought under the spot-light and even the weakest gets a chance of
getting stronger and more useful finally join’s the main strain.
viii. Qualification of Intangibles:
The whole process of value analysis is an exercise of converting the
intangibles to tangible for decision making purpose. It is really
difficult to make decisions on the issues where the things are
(variables) not quantifiable. However, value analysis does it. The
decision makers are provided with qualified data and on the basis
of decisions are made. Such decisions are bound to be sound.
ix. Wide Spectrum of Application:
The principles and techniques of value analysis can be applied to all
areas-man be purchasing, hardware, products, systems, procedures
and so on.
x. Building and Improving Company Image:
The company’s status or image or personality is built up or improved
to a great extent. Improvement in quality and reduction in cost
means competitive product and good name in product market; it is a
good pay master as sales and profits higher and labour market it
enjoys reputation; it capital market, nobody hesitates to invest as it
is a quality company.
10)Principles of Materials Handling (SEES_AWS_PLU)
a. Planning: Define the needs, strategic performance objectives and
functional specification of the proposed system and supporting
technologies at the outset of the design. The plan should be
developed in a team approach, with input from consultants,
suppliers and end users, as well as from management,
engineering, information systems, finance and operations.
b. Standardization: All material handling methods, equipment,
controls and software should be standardized and able to perform a
range of tasks in a variety of operating conditions.
c. Work: Material handling processes should be simplified by
reducing, combining, shortening or eliminating unnecessary
movement that will impede productivity. Examples include using
gravity to assist in material movement and employing straight-line
movement as much as possible.
d. Ergonomics: Work and working conditions should be adapted to
support the abilities of a worker, reduce repetitive and strenuous
manual labour, and emphasize safety.
e. Unit load: Because less effort and work is required to move
several individual items together as a single load (as opposed to
moving many items one at a time), unit loads—such as pallets,
containers or totes of items—should be used.
f. Space utilization: To maximize efficient use of space within a
facility, it is important to keep workareas organized and free of
clutter, to maximize density in storage areas (without compromising
accessibility and flexibility), and to utilize overhead space.
g. System: Material movement and storage should be coordinated
throughout all processes, from receiving, inspection, storage,
production, assembly, packaging, unitizing and order selection,
toshipping, transportation and the handling of returns.
h. Environment: Energy use and potential environmental impact
should be considered when designing the system, with reusability
and recycling processes implemented when possible, as well as safe
practices established for handling hazardous materials.
i. Automation: To improve operational efficiency, responsiveness,
consistency and predictability, automated material handling
technologies should be deployed when possible and where they
make sense to do so.
j. Life cycle cost: For all equipment specified for the system, an
analysis of life cycle costs should be conducted. Areas of
consideration should include capital investment, installation, setup,
programming, training, system testing, operation, maintenance and
repair, reuse value and ultimate disposal.