Introduction To Purchase
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Introduction To Purchase Presentation Transcript

  • 1.
      • WELCOME
      • TO
      • TRAINING SESSION
      • By : ISMT- PURCHASE
  • 2. TOPICS
      • 1. Concept of ERP & MRP.
      • 2. Supply Chain Management (SCM)
      • 3. Purchasing.
      • 4. Overview of JIT (Just-In-Time).
      • .
  • 3.
      • CONCEPT OF ERP & MRP .
  • 4. CONCEPTS OF ERP (ENTERPRISE RESOURCE PLANNING)
    • Definition of ERP :
    • Software solution that address all the needs of an enterprise with the process view of an organization to meet the organizational goals and intergrate all the functions of the enterprise.
  • 5. CONCEPTS OF ERP
    • What is ERP :
    • Facilitates Company – wide integrated Informaion Systems Covering all functional Areas.
    • Performs core Corporate activities and increases customer service augmenting Corporate Image.
    • Organizes & Optimizes the data input methodologies systematically.
  • 6. CONCEPTS OF ERP
    • Evolution of Planning Systems
    • Materials Requirement Planning (MRP)
    • Manufacturing Resource Planning (MRP II)
    • Enterprise Resource Planning (ERP)
    • Other Terminologies are :
    • Money Resource Planning (MRP III)
    • Supply Chain Management
    • Value Chain Management
  • 7. CONCEPTS OF ERP
    • Is It Only Jargaon ?
    • No. MRP and MRP II were there for a long time.
    • ERP is an enhancement over these
    • It is true that Year 2000 problem accelerated the sales and acceptance of ERP.
    • Introduction of ERP provides you a chance to have a new look at your working.
  • 8. CONCEPTS OF ERP
    • Is It Going to be there long?
    • Yes and No.
    • ERP will be there for a long time, if you are willing to upgrade to new versions with new features as and when they are released in the market
    • Your ERP may still work after a long time without enhancements, if your company is not growing!
    • Moral : Upgrading the systems are a must!
  • 9. CONCEPTS OF ERP
    • Do not wait if you have :
    • Tough competition in the market
    • Multiple location Operations
    • Plans to grow Globally
  • 10. CONCEPTS OF ERP
    • Why ERP ?
    • Profitability : You have Two Choices :
    • Increase in Sales
    • OR
    • Reduce Procurement Cost
  • 11. CONCEPTS OF MRP (Material Requirements Planning)
    • Definition of MRP ?
    • MRP is a software based production planning and inventory control system used to manage manufacturing processes.
  • 12. CONCEPTS OF MRP
    • An MRP system is intended to simultaneously meet three objectives :
    • Ensure materials & products are available for production & delivery to customers
    • Maintain the lowest possible level of inventory
    • Plan manufacturing activities, delivery schedules and purchasing activities.
  • 13.
      • SUPPLY CHAIN MANAGEMENT (SCM) .
  • 14. SUPPLY CHAIN MANAGEMENT
    • Supply Chain Management Strategem is :
    • Where business Partners mutually commit to work closely together, with in the supply chain,
    • To bring greater value to the consumer and/or their customers
    • For the least possible overall supply cost.
    • SCM is a Philosophy Where as Logistics is the enabler.
  • 15. A SIMPLE SUPPLY CHAIN LOGISTICS TRANSPORT STORAGE PACKING and HANDLING + DISTRIBUTION RAW MATERIALS SUPPLIER COMPONENT MANUFACTURER ASSEMBLER RETAILER TO FINAL CUSTOMER / CONSUMER
  • 16. THE GOAL IN SCM
    • Is to link
    • The Market place,
    • The Distribution Network,
    • The Manufacturing Process and
    • The Procurement activity in such a way that
    • C ustomers are serviced, at higher levels and yet, at lower costs!
  • 17. OBJECTIVES OF SCM
    • To weave each of the trading partners into Seamless fabric of :
    • Information flow,
    • Physical distribution flow and
    • Cash flow for the benefit of the end customer.
    • The trading partners achieve their profit or loss, through their ability to work together.
  • 18. Better Supply Chain Management helps a firm to...
    • Reduce total costs
    • Ensure continuity of production
    • Improve quality
    • Innovate
    • Respond quickly to market changes
  • 19.
      • PURCHASING .
  • 20. PURCHASING
    • Now What Is In Store 4 U?!
    • An Outcome Based Learning......
    • Delivered by Renouned Institutions
    • Through various structured Training Modules designed specially for you, we will walk you through the Art & Science of Procurement !
    • Aiming surely, to update U with the latest and proven Tools & Techniques of Procurement.
  • 21. DEFINING PURCHASING
    • Purchasing is the acquisition of needed goods and services at optimum cost from competent reliable sources to maintain a smooth flow of Goods & Services for Manufacturing and or any Business activity.
  • 22. DEFINITION EXPANDED
    • Needs : Examine need, Timing, Quantity, source, specifications
    • Goods & Services: Make or Buy or Lease
    • Optimum Cost: Best Total cost, not only lowest acquisition cost: consider also Quality and Service
    • Competent sources: Select carefully
    • Reliable Sources: Monitor Performance
  • 23. SCOPE OF PURCHASING
    • Involves all of those management processes and operations needed to ensure that an organisation is able to obtain, all of the products and services that it requires as and when & where required, cost-effectively, from outside sources.
  • 24. PURCHASING TASKS
    • Needs Assessment
    • Source identification
    • Contract Negotiation
    • Supplier Selection
    • Purchase Order Issuance
    • Expediting / follow up
    • Performance Evaluation
  • 25. PURCHASING AS A PROFIT CENTER
    • Enlightened companies view Purchasing as :
    • A vital meaningful function and not clerical.
    • A proactive, Strategic player, not a reactive hurdle
    • A powerful bottom-line contributor and no more a cost-center
    • A Team member and not a necessary evil.
  • 26. SAVINGS CAN BE EFFECTED BY PURCHASING IN FOLLOWING WAYS!
    • Moving to lower-cost Sources from traditional sources
    • Using less expensive substitute materials
    • Initiating Design Changes that affect cost but not performance
    • Suggesting the use of standard, off-the-shelf components instead of expensive Custom –tooled items.
  • 27. MORE SAVINGS BY PURCHASING !
    • Obtaining quantity discounts for larger, consolidated purchases and shipments
    • Reducing administrative expenses by issuing and tracking fewer purchase orders
    • Pooling purchasing power and effort with other organisations in the form of co-operative buying
    • Concentrating all purchases of a particular item with a single source.
  • 28. STILL MORE SAVINGS BY PURCHASING!!
    • Investigating international sources for quality and prices.
    • Getting suppliers (manufacturers or distributors) to assume the storage function for materials purchased from them
    • Negotiating for better price and/or more favourable terms from established sources.
  • 29. RELATIONSHIPS OF PURCHASE IN THE ORGANISATION
    • Sources Company
    Customers Suppliers Purchasing Marketing Quality Production Engg. Legal Transport Stores Finance Accounting Maintenance HR
  • 30. RESPONSIBILITIES PURCHASE SHARES WITH OTHER DEPARTMENTS
    • Obtaining technical information and advice on the quality, specifications of materials or equipment (Design)
    • Establishing and developing specifications for materials (R&D)
    • Inspection of materials for quality. (Quality Control)
    • Accounting including payment of bills. (Finance and Accounts )
    • Inventory control. (Materials planning)
    • Receiving, Store keeping and W/Housing, (Stores)
    • Construction contracts or service contracts and agreements. (Projects/Maintenance Office Administration)
    • Sale of scrap and surplus and salvaging. (stores)
    • Clearing and Forwarding. (Stores)
    • Deciding whether to Make or Buy or Lease (Production/Process planning).
  • 31. ORGANISATION FOR PURCHASE
    • As a crucial function in any business, Purchasing has to be well organised to perform its many and varied tasks efficiently and effectively.
    • Organisation refers to logical structuring of people and activities that allows them to interact smoothly for optimum performance.
  • 32. AIM OF ANY ORGANISATION
    • To deliver the Functional Responsibility for which it was primarily created –
    • In Purchasing, it is providing Materials and services efficiently and Cost effectively.
  • 33.
    • OVERVIEW OF J.I.T.
    • (JUST-IN-TIME )
  • 34. OVERVIEW
    • Definition of Just-in-time
    • Purchasing
    • Different uses
    • How it will help
    • Examples of Just-in-time
    • Purchasing
  • 35. BRAINSTORMING
    • How can just-in-time purchasing be used in an organization
  • 36. ADVANTAGES TO JIT
    • Reduces the need for central warehousing and storage
    • Long-term relationships that help to certify suppliers
    • Receiving inspection is reduced and in some cases eliminated.
    • Lowered variety in suppliers
    • Reliable delivery schedules
    • High quality materials used
    • Reduced waste.
  • 37. DEMANDS ON PURCHASING OF JIT
    • Reduced number of suppliers
    • Stable and good communication throughout a firm
    • Locating suppliers nearby
    • Long-term relationships
    • Helping suppliers to increase quality
    • Not to get hung up by single sourcing
    • Buying from small firms.
  • 38. LIMITATIONS OF JIT
    • Difficulty to change old ways
    • Employee commitment
    • Production levels
    • Employee skills.
  • 39. PRESENTATION OVERVIEW
    • JIT Purchasing Traditional
    • * Smaller lot sizes * Relatively large lot sizes
    • * More frequent deliveries * Less deliveries at higher
    • * No rejection from the quantities
    • Suppliers * Rejection from supplier
    • * Long-term contracts * Lowest price is main
    • * Buyer decides delivery objective
    • Schedule * Time consuming, formal
    • * Innovation encouraged paperwork
    • * Minimal paper work * Formal communication
    • * Less formal
    • communication
  • 40. WHY ORGANIZATIONS USE JIT PURCHASING
    • Reduce waste
    • Higher quality in products
    • Fewer suppliers
    • Reduction in warehouses
    • Dependable delivery
  • 41. EXAMPLE - FAXBAN
    • What is Faxban ?
    • It combines production floor fax machines and kanban re-supply signals to lower transaction processing and save money.
  • 42. EXAMPLE - FAXBAN
    • Honeywell started using this with their suppliers.
    • Re-supply orders are faxed from the production floor by the workers to suppliers.
  • 43. EXAMPLE - FAXBAN
    • What techniques are used in Faxban?
    • EDI
    • Kanban
    • Blanket Order
  • 44. EXAMPLE - FAXBAN
    • What were the outcomes?
    • Transaction processing reduced
    • Reduction in accounts payable function
    • Money saved
    • Reduced waste
    • Direct communication resulted in less ambiguity between supplier and customer
    • Time reduced.
  • 45. SUMMARY OF JIT PURCHASING
    • Many advantages that lead to reduction in waste , storage and other aspects that lead to saving money and time.
    • Long-term relationships with suppliers.
    • Many different techniques are used depending on the demand of the company.
    • Higher quality material used.