1. Unit 8
Supply Chain Management
Production and Operation Management
Ajit Dahal
BBA

2. Purchasing
• Represent 55% cost of finished product;
•Key competitive weapon supply-chain
management;
•policies, procedures, handling, control, type,
quantity;
•From internal and external supply chain;
•Link firm with its upstream suppliers;
•Buyer, facilitator, external liaison with suppliers

3. Functions of Purchasing
• Defining specifications for the purchased products;
• Selecting new suppliers price, quality and delivery;
• Classify suppliers especially with supplier
certificate;
• Supplier certification (profound evaluation
suppliers capabilities);
• Deciding whether to make or purchased;
• Monitoring of suppliers deliveries and follow-up;

4. Value Analysis/ Value engineering
• Customer’s view considered by analyzing value;
• Creative technique directed at analyzing functions;
• Value ratio of function and cost;
• Purpose; to simplify products, and processes;
• Deals with production, cost reduction technique;
• Starts with classification, identification of product

5. Vendor Relationship
• Historical origins in Japanese Keiretsu structure;
• Keiretsu, establish symbiosis relationship by
firms;
• Paradigm change in material and SCM;
• Transactional relationships is zero sum game;
• Collaborative relationships concern
interdependence, necessity of liaison;
• Supply alliances concern with institutional trust;

6. Learning Curves
• Line displaying time, cumulative units produced;
Assumption
• Time taken go down each time;
• Unit time decrease at decreasing rate;
• Reduction of time follow predictable pattern;
Models
• Log-linear, relationships between inputs per
product;
• States improvement in productivity is constant;

7. Forward Buying
• Purchasing quantities more than current demand;
• Usually when suppliers, offer provisional discounts;
• Dealers receives substantial discount resell
merchandise;
• Retailers can make as much profit;
• Move a large amount of inventory;
• More forward buying strategy, less cost

8. Thank You
And
Have a nice day