Professional Documents
Culture Documents
Key Takeaways
Procurement Make or Buy Supplier Evaluation and certification Basics of forecasting RFQ and RFP Reverse auction Benchmarking successful sourcing practices Preparing supply contracts Service level agreements
Learning Objectives
Describe purchasing, procurement and supply management. Understand the role of supply management and its strategic impact on an organizations competitive advantage. Have a basic knowledge of the manual purchasing process, e-procurement, public procurement, and green purchasing. Understand and know how to handle small value purchase orders. Understand sourcing decisions and the factors impacting supplier selection.
Introduction
Purchasing/ Procurement Obtaining merchandise, capital equipment; raw materials, services, or maintenance, repair, and operating (MRO) supplies in exchange for money or its equivalent Merchant BuyersWholesalers and retailers who purchase for resale Industrial BuyersPurchase raw materials for conversion, services, capital equipment, & MRO supplies
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offer & becomes a binding contract when accepted by supplier. When initiated by the supplier on their own terms, the document is a sales order.
Storage/Warehouse
Users/Requisition
START Materials Requisition MR 1
MR 2 MR 3
Accounting
No
Materials Available?
Purchase Order PO 1
PO 2
Purchase Order PO 1
MR File
MR 2
Issue Materials
Materials
DO 3 DO 2
Delivery Order DO 1
PO File
PO 3 DO 2 MR 2
MR File
Ship Materials
DO 2 PO 2
+
Delivery Order DO 1
MR 2
Materials
Accounts Payable
PO 2
Materials
+
Delivery Order DO 1
INV 2
Invoice INV 1
Invoice INV 1
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Collects and reviews bids submitted by suppliers through Internet based B2B system or fax
Assigns suppliers to requisition on B2B system for bidding and specifies closing date and other conditions
Selects a supplier based on quality, cost and delivery performance, then issues a Purchase Order
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Supplier Selection
The process of selecting suppliers, is complex and should be based on multiple criteria: Product and process technologies Willingness to share technologies & information [Early supplier involvement (ESI) and concurrent engineering (CE)] Quality Cost (Total cost of ownership or acquisition) Reliability Order System & cycle time Capacity Communication capability Location Service
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Decentralized Purchasingindividual, local purchasing departments, such as plant level, make their own purchasing decisions.
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