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CHAP1:Introduction to Purchasing and Supply Chain Management
Looking Ahead
Four Enablers of Purchasing and Supply Chain Management
Real-Time and Shared Information Technology Capabilities
Capable Human Resources
Proper Organizational Design
Right Measures and Measurement Systems
Purchasing Is Important
Improving quality and reputation
Contributing to competitive advantage
Reducing time-to-market
Building relationships and driving innovation
Traditional approach is to bargain hard for price reductions
Newer approach is to conduct joint cost reduction with suppliers
Both buyer and supplier must benefit
Increasing value and savings
Suppliers have substantial impact on a firm’s total cost
In manufacturing, purchased content is more than 55% of revenues
Purchasing
Buying
Negotiation
Supplier identification and selection
Contracting
Supply market research
Supplier measurement and improvement
Purchasing systems development
The Five Rights of Purchasing
At the “right” time
For the “right” price
In the “right” quantity
From the “right” source
Getting the “right” quality
Supply Management
A strategic approach to planning for and acquiring the organization’s current and future needs through effectively managing the supply base
Defining Supply Management
The Supply Chain Umbrella
Quality control
Demand and supply planning
Inbound transportation
Receiving, materials handling, and storage
Material or inventory control
Capable Human Resources
Purchasing strategies
Supplier analysis
Supplier relationship management
Competitive market analysis
Need for close collaboration with suppliers
CHAP 2 :The Purchasing Process
Roles and Responsibilities
Elements of the Purchasing Process
Ensure payment occurs promptly
Ascertain that need was effectively met
Develop ordering mechanism
Ascertain that need was effectively met
Business Buyer Behavior
Purchasing Objectives
Supplier performance management
Develop aligned goals with internal stakeholders
Manage sourcing process efficiently and effectively
Supply assurance
Develop integrated supply strategies that support business goals and objectives
Supply Continuity
Source them at right specification that
meets users’ needs
Source them in right quantity
Source them from right source
Arrange for delivery/service performance at right time to right internal customer
Source products/services at right price
Manage Sourcing Process
Provide professional training and
growth opportunities for employees
Develop and adhere to administrative
budgets
Introduce improved buying channels
within procure-to-pay systems
Determine staffing levels
Supplier Performance Management
Identify new suppliers with high potential and develop closer relationships
Improve existing suppliers
Select competitive suppliers
Develop new suppliers that are not competitive with current suppliers
Develop Aligned Goals with
Internal Stakeholders
Consider internal customers as
stakeholders
Establish strong cross-boundary
communication
Develop cross-functional coordination
and collaboration
Develop positive, problem-solving
relationships
E-Procurement and the Procure to Pay Process
Forecast and Plan Requirement
Needs Clarification: Requisitioning
Supplier Identification and Selection
Approval, Contract, and Purchase Order Preparation
Receipt and Inspection
Invoice Settlement and Payment
Records Maintenance
Continuously Measure and Manage SupplierPerformance
Re-engineering the Procure to Pay Process
CHAP4: Supply Management Integration for Competitive Advantage
Internal
Integration
Supply Management’s Internal
Linkages
Supply Management Integration for Competitive
Advantage
Integrating Supply Management, Engineering, and Suppliers to Develop New Products and Services
Supply Management’s External Linkages
Collaborative Buyer-Seller Relationships
Advantages of Closer Buyer-SellerRelationships
Obstacles to Closer Buyer-SellerRelationships
Critical Elements for Supplier RelationshipManagemen
The Critical Role of CrossFunctionalSourcing Teams
Benefits Sought from the Cross-Functional Team Approach
Potential Drawbacks to the Cross-Functional Team Approach
When to Form a Cross-Functional Team
Improving Sourcing Team Effectiveness
