New Directions of Procurement and

Supply Chain Management

Submitted ByAhmed Ali (860828)

Ali Ammara (860657)Ali Dow (862247)

Submitted ToProf. David Burnell

April,28,2010

Introduction

• procurement function is part of logistics system.

• Procurement is one the important activities of the supply chain.

• Procurement plays an important role in achieving the organization goal.

• Buying is an important role in the profit of the organization.

• What is the supply chain planning.• Classifications of procurement activities. • The role of procurement within business organizations • The objectives of procurement and supply • The procurement procedures • The selection and evaluation of a supplier • The benefits and disadvantages of buying • The logistical organization of procurement processes • Strategy of Logistics

WHAT IS SUPPLY CHAIN PLANNING ?

Supply Chain is a set of activities (e.g. purchasing,manufacturing, logistics, distribution, marketing) that perform the function of delivering value to end customer

Traditionally, all the business units along a supply chain have their own objectives and these are often conflicting

There is no single plan to carry out supply chain activities

Procurement activities

1. Buyback

2. Purchase for consumption or conversion

The Role of Procurement within Business Organizations

• The procurement function is one of the business functions

• The procurement function is required to support the labor productivity.

• The procurement function play an important role in managing manufacturing abroad.

Goals of Purchasing and Supply

1. Administrative level

• Quality

• Amount

• Price

• Time

• Sourcing

2. Operational / Functional level

– Material and service flow

– Wise Purchase

– Achieve competitive procurement

– Reduce the stock cost

– Development of new sources

– Development of good relations with suppliers

3. More detailed level

– Purchasing policies (manual)

– Selection of suppliers and awarding contracts

– Review material specifications and purchase orders

– Policies on Public Tenders

– Policies relating to ethical practices

Procurement Procedures

1. Represents the general framework and direction of the actions .

2. Represent the means to run the input information from outside the organization.

3. Procurement cycle.

4. Feel the need.

5. Check the availability of appropriations.

Examples-Decisions within the Organization

Type of transfer Strategic Technical Operational

Location Size – Location status of inventory Costs

Transport Kind of transport quantities and mix of service

Time

Run Command Design system Customer requests Facilitating requests

CS Standers of CS - -

Offers Procurement policies Choice supplier Issuance of purchase orders

Triangle Logistics Strategy

Customer Service Goals* Product* Logistics service* Information system

Transportation• Principles of Transport• resolutions of the Transport

Inventory• demand forecasting• Principles of Storage• resolutions of the stock• purchasing decisions and scheduling of supply• Resolutions Storage

location• Location decisions• Logistics network planning process

Purpose of Procurement

• Flow of raw materials and services.

• Level of inventory investment.

• Level of service.

• Competitive situation. • Goals of the organization.

How to choose a supplier?

• 14 Steps to choose a supplier:

1. Lead Time

2. Lead time variability

3. Delivery time

4. Delivery time variability

5. Communication

6. Ability to send

7. Vendor errors.

8. Maintenance.

9. Quality

10.Price

11.Experience

12.Terms of contract

13.Services after sell

14.Confidential data

Evaluation of the supplier

They are several criteria to measure the performance of suppliers, such as:

1. Effect the price

2. Saving

3. Control

4. The material flow

5. Delivery

6. Planning

Procurement Contracts

1. Procurement contracts recovered

2. Partnership contracts in the flow

3. Contracts amounts

The Benefits of Purchasing and Supply External

• Economies of scale • Risk reduction • Reduce the capital invested • Focus on the goal of the

organization • Increased flexibility

Disadvantages of Purchasing and Supply the Outer

• Lack of knowledge of competitors • Collision targets • A system for integrated logistical

Logistical Organization of Procurement Processes

1. Structure and control

– Centralized structure for decision-making.– Cost analysis for decision support site.– Cost of holding inventory, costs and interest of the

process of delay.– Re-evaluation of global logistics network.

2. Outsourcing from Abroad and to Participate

Range of activities in the value chain

Increased outsourcing

Strategic decision taken centrally with the monitoring and control in the performance of suppliers.

3. Logistics Information

– Global logistics management. – Global leadership in the field of business. – Time-delay.– Quick respond. – Information system.

Consumer choice of suppliers

• Internet• Government Directory• International and regional organizations• Experience• Reputation• Competition

References

• Chopra, S., & Meindl, P. (2007). Supply Chain Management 3rd edition.

http://www.clipart.com/en/close-up?o=3859416&memlevel=A&a=a&q=question&k_mode=all&s=1&e=21&show=&c=&cid=&findincat=&g=&cc=&page=&k_exc=&pubid=

http://www.clipart.com/en/close-up?o=3983517&memlevel=A&a=a&q=thank%20you&k_mode=all&s=1&e=21&show=&c=&cid=&findincat=&g=&cc=&page=&k_exc=&pubid=

http://www.clipart.com/en/close-up?o=749807&memlevel=D&a=a&q=end&k_mode=all&s=1&e=21&show=&c=&cid=&findincat=&g=&cc=&page=1&k_exc=&pubid=