Professional Documents
Culture Documents
Procurement and
Manufacturing Overview
PLAN
DESIGN STRUCTURE
OPERATING TACTICS
Create
Demand
EXECUTION MANAGEMENT
1.0
2.0
3.0
4.0
5.0
ACQUIRE
CONVERT
DELIVER
SUPPORT
COMMIT
supplier
management
production
management
logistics
management
service
management
order
management
best
Create
Solutions
1.0
2.0
3.0
4.0
Create
Demand
5.0
EXECUTION PROCESSES
BUY
Purchasing
& supply mgt
MAKE
production
DELIVER
logistics
SUPPORT
after
sales service
COMMIT
order
management
1. Requirements
4. Supplier Selection & Evaluation
2. Spend Analysis
5. Supplier Development
3. Relationships (SRM) 6. Technology & Improvement
Mfg= 12%
Matls = 50%
Characteristics
Procurement Environment
OLD
Place POs
Lowest price
Long product cycles
Centralized orgs.
Reactive mode
Line position mentality
Domestic base
NEW
Develop sources
Lowest TCO
Shorter product cycles
Flatter organizations
Concurrent NPI
Internal integration
Global
TCO Example
Component
Price per Ton
Logistics
Receiving
Inventory
Waste
Total Cost per Ton
$98.62
106.48
19.96
4.45
.58
.15
2.28
.87
.05
.09
$121.49 $112.04
Procurement-Logistics
Operations Integration
Lead Time
A span of time required to perform a process
APICS Dictionary
APICS Dictionary
APICS Dictionary
1-11
Purchase
Manufacture
Assemble
Distribute
Engineerto-Order
Manufacture
Assemble
Make-toDistribute Order
Inventory
Assemble
AssembleDistribute to-Order
Inventory
Distribute
Assemble
Make-toStock
Reprinted with permission, J.R. Tony Arnold, Introduction to Materials Management, Prentice-Hall.
1-12