Professional Documents
Culture Documents
Purchasing
Purchasing
org
Business Need
Requirement Definition
Procurement Strategy
Florist
Packaging
Arrangement materials
FedEx delivery
Internet services
Purchasing objectives
Buy to requirements so that Inventory is available when, where and in wanted form (minimum effort to use) Least cost for quality Optimise purchasing department/function overheads, accumulated costs, cash flow, warehousing & timely delivery The BUYER is the KEY - responsible for researching, placing and progressing orders.
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Questions
Why is purchasing for a Channel Tunnel project different from purchasing for Tesco or Gap ? Why is purchasing for ASDA different from purchasing for Harrods? What are the purchasing requirements of the Metropolitan Police? Why is the futures market important for Nestle or Kelloggs? What are the advantages of centralised vs. decentralised purchasing functions? The know-how: knowledge-base, competencies, the skills of the buyer for www.dabs.co.uk?
Catalogues, drawings/specifications.
CAD , bill of materials & MRP1 - the detail of what we order Catalogue changes - part change & the ripple effect Deletion or launch of products
POP:
Requests, authorisations, purchase orders, GRNs, invoices, payments. Call-offs from orders. Segmentation of duties, physical verifications SOP, forecasting & POP
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Exception for action & progress reports for planning Audit & monitoring procedures: wastage, obsolescence, theft, stock-outs. Pareto 80/20, warehousing costs
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Supplier owned & managed strategic inventory Optimize Capacity Daily Through-put J.I.T. for Common Parts
A c c o u n t s
MTS
R e c e i v a b l e
Distributor/Customer
Flow Manufacturing
Min/Max Replenishment Common Inventory
JIT Supplier
JIT
Accounts Payable
BANK
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Delivery on Demand
Interprise Visibility
WIP
Inventory
Distributor
Supplier
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Purchasing
ERP Engines
- Oracle - SAP
Order Management
SCM
Export / Import & Freight Management Forecasting and Demand Planning Warehousing & Distribution
Supply/Procurement Issues
Resource Usage Performance objectives Quality Speed Reliabiity
Flexibility
Cost
Market competitiveness
Consider
the detail of B2B system interactions planning, design, control of information & materials flows along the SC to meet customer requirements efficiently, now & future. methods of coordination in the SC how can the SC be improved 'structurally? what technology e.g. EDI, WWW/internet has affected the development of SCM?
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Non-exclusive relationships e.g. Firm C - may single source (exclusive supply) or multi-source item X Exaluate relationships close & intimate? Make or contract in (outsource)? For what items: strategic, trivial? Many suppliers or a few? Keiretsu (collaborative) vs. Transactional (arms-length)
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Company B
Company C
X X
X X X
For Company A Internal supply network Immediate supply network Total supply network
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Down stream
Up stream
operation
Type of inter- firm contact Transactional - many Close - few suppliers suppliers
integration
Market relationship
Resource scope
Do nothing Do everything 22 Character of internal operations activity
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Design changes
Bill of materials
MRP1
Inventory data
Control Reports
Stock movements
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accuracy) What corporateclaims warranty objectives? innovative products/services - (against agreed Audit service quality differentiation & advantage control SLAs) over costs thru. systems supplier development & R&D call-out & service response times appraisals of new supply chains. performance against agreed delivery reputation istimes risk by activities within the SC lead not at
Proactive & visible alignment of P&S strategy & operations to fit corporate position the basics contribute to value-add (right goods/services, right place, right Product quality time, right price). MTBF (Mean Time to Fail) ample evidence if P & S is delivering key objectives % of incoming rejects (delivery post contract monitoring - vendor rating
Company report states costs of goods sold for year = 160 m. + total average inventory (prodn. materials + WIP) = 35 m. usual stock turn ratio = 10. What is this years stock turnover ratio? What does it mean?
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Strategic alliances
Part Number Doc-00341 Chas-00798 Sen-00332 Con-00544 Pack-00456 Qty Description 1 1 2 1 1 Assembly and use instructions for valve kit Mechanical valve parts Sensor specification control module with interface kit Packaging specification Supplier Salleramics Flor plan Ltd Florplan Ltd Florplan Ltd Salleramics
Joint SCM improvement objectives share/feedback demand information MURA, quality, reliability, speed, JIT replenishment, costs, security 1st & 2nd tier suppliers read/write permission to enter BOMs, enter new suppliers, enter alerts, update status, acknowledge requests, view reports etc?
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Outsourcing?
moving a firms internal activities (production & service delivery) to outside providers. Why do it? Drivers Core competencies, stick to the knitting. No strategic expertise loss Improvement - contractor is more competent, reliable, high quality, price/cost effective, release of management time Finance: releases internal assets. Out-source costs are less than or equal to DIY costs Short term revenue gains - selling off fixed to out-source agent Specialist labour market - cannot hire expert staff we need. No expected loss of flexibility or growth potential WHAT ARE THE PROBLEMS?
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Brunei
before landing, radio defect symptoms to control control analysis/troubleshoot identify parts for indent trigger pick items at warehouse apply FIFO priority issue movement update collect defect items Repair shop check repair status tracking global assets & freight
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Provisioning(MRP)
Disposal
Usage
- FMS or commercial - R for Quote - PO - Payt -Inspect -accept & locate -reject quarantine/claim -wholesale/retail level
Procurement
Distribution
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Gems of PO Receiving
how goods are received can be a headache receiving problems are credit/payment problems errors & confusions cause delays & more processing Transactions on goods received:
correct Order Ref, quantity, specification & pricing Items shipped match PO & invoiced quantity? split shipments - item consolidation? How? reaction to shortage
What % of invoices are paid via auto-pay? When do we have to pay? If it is valuable someone will steal it !!!!
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Control Methods
procurement procedures, processes & policies (incl. ethical code retransparency & declaration of interest). risk analysis random audits of different contracts & procurement projects. financial limits e.g. open-to buy, how much each buyer can commit disciplinary & whistle blowing policies rotations: buyers not too close to favourite suppliers
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eBusiness - B2B
$ value of transactions over the Internet? B2B, B2C? significant channel for purchasing MNCs can get best prices without using open eMarketplace. growth in Intranet B2B applications installed & operational EDI (point to point) still an important re-volume of B2B transactions Fax & email is common online B2B portals (eMarketplaces) offer Supplier/supplies intelligence (specialist groupings) opportunities/collaborations e.g. networked participants (SMEs? Hospitals) to combine spend & bargaining volume. potentially lower buying costs & operating efficiencies NHS Purchasing & Supply Agency http://www.pasa.doh.gov.uk/
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Raw materials
Work in process
Finished goods
Supplier
Manufacturing plant
Distribution center
Retailer
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Materials Management
FG storage
Egg supplier
Sugar supplier
Flour supplier
RM storage
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Materials Management
FG storage
RM storage
Egg supplier
Sugar supplier
Flour supplier
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Materials Management
FG storage
RM storage
Egg supplier
Sugar supplier
Flour supplier
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Materials Management
Supermarket A distribution center Distribution domain of responsibility Supermarket B distribution center
FG storage
RM storage
Egg supplier
Sugar supplier
Flour supplier
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Materials Management
Supermarket A distribution center Distribution domain of responsibility FG storage Supermarket B distribution center Transportation services supplier
RM storage
Egg supplier
Sugar supplier
Flour supplier
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Inventory Measures
Average inventory = 2 million Cost of goods sold = 10 million 52 business weeks per year
Inventory Measures
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Customer Relationship
% of orders taken
Order Fulfillment
shipped % of orders shipped on time Time to fulfill order % of botched services or returned items Cost to produce service or item Customer satisfaction with order fulfillment process
Supplier Relationship
deliveries on time Suppliers lead times % defects in services & purchased materials Cost of services & purchased materials
accurately Time to complete order placement process Customer satisfaction with order placement process
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Supply-Chain Design
DESIGN FEATURES FOR EFFICIENT & RESPONSIVE SUPPLY CHAINS
Factor
Operation strategy