pptsection5 purchasing

7/24/2019 PPTSection5 Purchasing

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SMEs Projects 1

PurchasingPurchasing

Logistics for SMEs

Federal of Thai Industries


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1.

1.

6.

6.

4.

4.

3.

3.

2.

2.

7.

7.

5.

5.

8.

8.

9.

9.


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(Purchasing)


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(objectives)

(. 2547)


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Logistics


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outsource subcontract

AT&T

William Mark AT&T


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(

)

(

) (transaction)


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strategic purchasing


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()


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scope


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(categories)

1. (components)

2. (raw materials)

3. (operating supplies)

4. (supporting equipment)5. (process equipment)

6.

(services)


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((Purchasing)Purchasing) (Procurement sourcing)

(Strategic sourcing) (Supply management)

(Supplier management)


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Supply Chain Management

Source: The International Center for Competitive Excellence, University of North Florida.

Performance metrics

Keybusinessprocesses

Customer relationship management

Customer service management

Demand management

Order fulfillment

Manufacturing flow management

Procurement

Product development and commercialization

Returns channel

Logistics Management

Information flow

Purchasing

MRP

Tier 1supplier

MRP

Materialsmanagement

MRP

Production

MPS

Physicaldistribution

DRP

and salesMarketing

DRP

Customer

DRP

Product Flow

Just-in-timeEDI EDI

Quick response

supplierTier 2

MRP

Consumer


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Best Practice

5M+I

Best Practice

5M+I

Best Practice

5M+I

Best Practice

5M+I

Best Practice

5M+I


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Purchasingis responsible for obtaining the materials,

parts, and supplies and services needed to produce a

product or provide a service


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Identifying sources of supply

Negotiating contracts

Maintaining a database of

suppliers

Obtaining goods and services

Managing supplies

Duties of Purchasing


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1.

Requisition received

2. Supplier selected

3. Order is placed

4. Monitor orders

5. Receive orders

PurchasingPurchasing

LegalLegal

AccountingAccountingOperationsOperations

DataData

processprocess--

inging

DesignDesign

ReceivingReceiving

SuppliersSuppliers


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Matl. = 53.2 %

Eqpt. = 3.5%

Total = 56.7%

Prod. emp. = 10.7%Other emp. = 0.1%

Total = 10.8%

18.9%

3.6%

Source: Dobler and Burt, 1996


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(cost center)

()


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(productivity)


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1. ()

2. 3.

4.

5. 6. (

)

7.


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/


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Supply Chain ManagementSupply Chain Management

1

2

Customer relationship management

Customer service management

Demand management

Order fulfillment

Product development and commercialization

Returns channel

Procurement

Manufacturing flow management

Product Flow

SupplyChainBusine

ssProcesses

Supply Chain Management ComponentsSupply Chain Management Components Product structure

Management methods

Power and leadership structure

Risk and reward structure

Culture and attitude

Planning and Control

Process (work) structure

Organization structure

Product flow facility structure

Information flow facility (IT) structure


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(fulfillment)


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Best

Practice

5M+I

Best

Practice

5M+I

Best

Practice

5M+I

Best

Practice

5M+I

Best

Practice

5M+I


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1.

2. 3.

4. 5.

(())


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6. 7.

(supplier) 8.

9. 10. ()

(())


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Cost of SearchNegotiated Price

Transportation CostInspection CostStartup Cost

Storage CostOperating, CostMaintenance CostInventory Costs

Disposal Cost

AcqusitionCost

In-HouseCost

LifeCycleCost

TotalCost of

Ownership


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Deliverables

Purchasing ManufacturingDistribution

Sales

What (item)

From

(supplier)

Where(warehouse)

When (receive)

Quantity

What (item)

Where (plant)

How(method)

When (manufacture)

Quantity

Over Time

Ship from(Plant, DC)

Ship to (DC,Customer)

How(transportation method)

When (dispatch)

Stock levels

Acceptor reject (sales order,

forecast order)

Available toPromise (ATP)

Capableto Promise (CTP)

Delivery (full,partial)

Backorders

maximize profit


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(specifications )

()(

)

(requirements)


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......

1. (Conformance)

2. (Aesthetics)3. (Durability)4. (Performance)5. (Reliability)6. (Features)

7. (Serviceability)8. (Perceived quality)


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1. (Dissatisfy)2. (Satisfy)3. (Delight)

++

100100%%

(Kanos Model)


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1. (Dissatisfy)


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2. (Satisfy)

3 (D li ht)


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3. (Delight)


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= -


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1. (Cost comparison)2. (Manufacturing system

analysis)

3. (Motion analysis)4. (Make or buy)

5. (Standardization)


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. 1,200

6 (.)4 .

(Supplier) 2

2


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22

(Super Snack Co., Ltd.) 400 (100 . 20 .)

50 500 (+ + )

5 55 2

200


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JUST IN TIMEJUST IN TIME


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JUST IN TIMEJUST IN TIME

=

TOYOTA Ohno

(Bottleneck)

()Ohno (Reduce Lot Size)


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JUST IN TIME


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JUST IN TIME

== == ==== ====

==

==Quality CircleQuality Circle==

J t I Ti


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JustJust

--InIn

--TimeTime

A BC

D

3 3 3 3

STORE

Just-In-Time (JIT) Example


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Just In Time (JIT) Example

Work in process inventory levelWork in process inventory level

(hides problems)(hides problems)


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spot buying / spot purchase (Blanket orders) consolidated billing (Invoiceless purchasing) (Electronic ordering and funds

transfer)

Electronic data interchange (EDI) Stockless purchasing

Standardization

Outsourcing


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1.

2.

3.

4.

5.

1.

2.

3.

4.

5.

( )


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6. 7. 8.

9.

10.

6. 7.

8.

9.

10.

(

)


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()

(

)

e.g. cross functional team

()


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()

Source: Douglas M. Lambert, Margaret A. Emmelhainz, and John T. Gardner, Developing and ImplementingSupply Chain Partnerships, The International Journal of Logistics Management, Volume 7, No. 2. (1996), p.2.

?


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?

(vertical integration)

Source: Douglas M. Lambert, Margaret A. Emmelhainz, and John T. Gardner, Developing and Implementing SupplyChain Partnerships, The International Journal of Logistics Management, Volume 7, No. 2. (1996), p.2.


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-Honesty-Financial viability

-Reciprocity

-

-

--

- Source: Ronald H. Ballou (2004)

()


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just-in-time

Source: Ronald H. Ballou (2004)

( )

()


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( )

()


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()

(selective tendering)


( )


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just-in-time

--CPM/PERT

--

--

-


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1.1.

2.2. 3.3.

4.4.

(())


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5.5.

6.6.

7.7.

8.8.


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1.1.

2.2. 3.3.


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1.1. (Quantity)(Quantity)

2.2. (Quality)(Quality)

3.3.

(Time)(Time)

4.4. ((Cost)Cost)


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(Order cost)

Changeover (setup) cost

(1 5 )

(1 5 )

(0 25 )


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:


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:

You can only manage what you can measure

Anything that is measured improves

:


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Faster response to the customer at lower cost and higher quality

A competitive advantage!


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(risk)


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New Product Development


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New Product Development


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ComputerComputerSonySony

(risk management)


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(trade-off)

credit


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OutsourcingOutsourcing


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OutsourcingOutsourcing

Suppliers


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Choosing suppliers

Evaluating sources of supply

Supplier audits

Supplier certification

Supplier relationships

Supplier partnerships


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()


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(lead time)


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-

vs.


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/


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?


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()

(holding costs)


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1995 Corel Corp.

1 2 3


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1 2-3

(JIT)

()

1995

Corel Corp.

(contract management)


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()

:

()

(mutual benefits)

(aspect) (adversary) (partner)


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Number of suppliers

Many One or a few

Length of relationship

May be brief Long-term

Low price Major consideration Moderately important

Reliability May not be high High

Openness Low High

Quality May be unreliable; buyerinspects

At the source; vendorcertified

Volume of business May be low High

Flexibility Relatively low Relatively high

Location Widely dispersed Nearness isimportant


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1.Reduce cost of making the purchase2.Reduce transportation costs3.Reduce production costs4.Improve product quality5.Improve product design6.Reduce time to market7.Improve customer satisfaction8.Reduce inventory costs9. Introduce new products or services


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Toyota

Bose, Chrysler, Harley Davidson

Vendor Managed Inventory


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Direct Materials Purchasing Moves

Online


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Strategic importance


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g pCostQualityAgility

Customer serviceCompetitive advantageTechnology managementBenefitsRisks

Increased outsourcing

()


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Increased outsourcing

Just-in-time

Globalization

(MRP)


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Materials Requirement Planning (MRP):

(Enterprise ResourcePlanning: ERP)


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GE automated Web-based

purchasing system

Intel

80 19,000


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Green Sourcing


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(supplier)


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(ethical purchasing)

(ethical purchasing)


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Good governance

(Ethics)


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A theory or system of moral values, the principles of conduct

governing an individual or group

(Pitfalls of Buying)


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Inducements

Bribery

Purchasing Fraud

Protection via

(Ethical Code)


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Integrity

Optimising Resources

Professional Practice spirit of the Law

(Ethical Guidance)


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Things to consider:

Declaration of Interests

Confidentiality & accuracy of information

Competition

Business Gifts

Hospitality

Business Dining

Records

(Buying Ethically Practicalities)


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Professional standards

Procurement Management

Underpinned by Core Values and Governance

Corporate Governance


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Standards of Business Conduct

Code of Conduct

Code of Practice on openness

Professional Codes of Practice

(H t &T )


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(Honesty &Transparency)

(Accountability) (Integrity)

(Participation)

(Equity and Fairness)


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...

(responsibility to employer)


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(conflicts of interest) (gratuities) (confidential information)

(treatment of suppliers) (reciprocity)

Summary of Ethical Buying


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Operations Management Textbooks

, , . . 2549.


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, , :

(JETRO). 2548. ABC. LogisticsCost Analysis. .

Rushton, Alan, Phil Croucher, and Peter Baker. 2006. The handbook of Logistics and Distribution

Management. 3rd edition. The Chartered Institute of Logistics and Transport (UK).

Kaplan, Robert S., and David P. Norton. The Balanced Scorecard. 1996. Harvard Business School

Press.

Fernie, John, and Leign Sparks. 2004. Logistics and Retail Management: insights into current practice and

trends from leading experts. 2nd edition. The Chartered Institute of Logistics and Transport (UK).

Cohen, Shoshanan, and Joseph Roussel. 2005. Strategic Supply Chain Management. McGrawHill.

pptsection5 purchasing

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