Supply chain Management including Procurement, Inventory Control & Logistics

1. 1
Ankur Tiwari
NMSCE – P2 | 3455
14 August 2019

2. 2
What is Supply Chain Management?
It is the management of flow of goods & services involving the
sourcing , movement and storage of materials , inventory tracking
and ensuring delivery to the user within right time, right cost
while satisfying service level requirements.
Plan Source Procure Logistics Store End User
Supply Chain Management Process(SCM)

3. 3
• Why it is Important?
• SCM plays an important role in sourcing and
obtaining material & services for the end user
within budgeted cost and stipulated time.
Currently, SCM plays an integral part of a
Company's success.
Supply Chain Management Process(SCM)

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• Supply Chain Management Process Consist of
following activities.
• Procurement of Material and Services
• Stores ( Inventory Management)
• Logistics
SCM
Purchase
Logistics
Stores
(Inventory
Control)
Supply Chain Management Process(SCM)

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Procurement of Materials
• Purchasing is one of the most important functions of the
site stores department which ensures the availability of
materials at the site, and the planned job at hand gets
executed at the intended time.
CURRENTLY THE PURCHASE FUNCTIONS ARE BIFURCATED
HO
PURCHASE
SITE PURCHASE

6. SITE PU
• Aggregates/Bricks
• Fuel & Lubricants & Spares
• Hardware, Painting & Chemicals
• Shuttering Consumables
• Minor Assets & Tools
• Safety Material
• Other Construction Material
• Wire Ropes
• Wood & Timbers
• Pipe & Pipe Fittings
• Electrical Items
SITE
PURCHASE
• Reinforcement steel
• Structural Steel
• Shuttering Material
• Cement
• Major Assets
• Other bulk & High value materials
HO
PURCHASE
Procurement of Materials

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Request for
Quotation
(RFQ)
Receipt of
Quotation
Inventory Check
Comparison &
Negotiation
Finalization &
Justification
Approval
PO
Receipt of
Material
Inspection
No. of
Enquiries
Number of
quotations receipt
Specification
check
Quality
Check
Checking earlier
procurement
details
Invoice
check
Quality
Issue
Accept
Reject
Feedback to supplier
Previous Track
Record of
Supplier
Purchase
Requisition
Procurement Process flow

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PURCHASE REQUISITION
Purchase Requisition : It’s the most basic & Important document
containing :
• Material Description & Technical Specification
• Quantity & Quality
• Purpose of requirement
• Required by date: It is the date on which material is required by the
User
– By providing appropriate lead time it will enable Purchaser to provide
good quality with competitive rates

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Managing Purchases
• Key Factors That Affect Purchasing
(The 5 Rights)
Selecting the Right quality
Buying the Right quantity
At the Right time
Choosing the Right vendors /Source
Getting the Right price

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Considerations in Vendor Selection
VENDOR
SELECTION
PRICE
QUALITY
DISTANCE
SERVICE
REPUTATION
Vendor Selection

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Bar Coding
of Mat
Codes
Proper
Stacking of
Material
Issuing of
Material
against MIV
Consumption
booking
(stock Out)
Regular
Physical
Verification
Authorization
Check
Goods Receipt
Stores Material Issue Process

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Weigh Bridge
– Weight
taking
Quality
Check by QC
Dept
Un Loading of
Material
Tare Weight
Verification / Printed
Weigh slip with
Photo
Storage
Security Entry
Receipt of Bulk Materials Process

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Sample Copy of Weighing Slip

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Inventory Management
S. No. Activity
1 ABC Analysis - ABC analysis is an inventory management tool, Classification is based on % of Annual
Consumption Value.
ABC analysis is also known as “ Always Best Control”
A' items – 70/20 Rule - 20% of the items having annual consumption value of 70% of inventory
(Items like Steel, Cement, Aggregates, Fuel)
B' items – 25/30 Rule – 30% of the items having annual consumption value of 25% of inventory
C' items – 05/50 Rule - 50% of the items having annual consumption value of 5% of Inventory
2 FSN Analysis - Definition – Fast Moving , Slow Moving and Non Moving Items.
VED analysis – Vital , Essential and Desirable items to be Identified
Just-in-time (JIT) – Requirement Based
Economic order quantity (EOQ) – To avail Bulk Discounts and to reduce the Logistics Cost
Class Items Consumption Value
A 20% 70%
B 30% 25%
C 50% 05%

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ABC Analysis
200000
500
20
199500
500
19
199000
500
18
198500
500
17
198000
500
16
197500
500
15
197000
500
14
196500
500
13
196000
1500
12
194500
1500
11
193000
1750
10
191250
2750
9
188500
4000
8
184500
4500
7
180000
5000
6
175000
7500
5
167500
7500
4
160000
20000
3
140000
50000
2
90000
90000
1
CUMMULATIVE
CUMMULATIVE
COST
COST [Rs.]
ANNUAL COST
ANNUAL COST
[Rs.]
ITEM
ITEM COST %
COST %
ITEM %
ITEM %
70 %
70 %
20 %
20 %
10 %
10 %
10 %
10 %
20 %
20 %
70 %
70 %
ABC
A
N
A
L
Y
S
I
S
WORK
SHEET

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Inventory Management -Consumption

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Inventory Management-Storage Sequence

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Key Points to Remember!
Aware of the hazards in Stores. Chemicals ,Fuel, Lubricants & Paints are to be stored
separately .
Always practice safe lifting.
Use material-handling equipment safely.
Stack and store materials properly.
Practice good housekeeping, and wear required PPE.

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Stacking & Storage of Materials
In House Materials Stored Group Wise

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Stacking & Storage of Materials

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Stacking & Storage of Spares

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Stacking & Storage of Pipes

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Stacking & Storage of Scaffolding materials

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Stacking & Storage of Scaffolding materials

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Stacking & Storage of Scaffolding Pipes

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Stacking of material -Stores Over view

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Stacking & Storage of Gas Cylinders

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Stacking & Storage of Scaffolding materials

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Stacking & Storage of Chemicals

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Stacking & Storage of Wood & Timber

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Stacking & Storage of Rejected Material
(New)

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Stacking & Storage of Rejected Material
(Not in Use)

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Scrap Management
S. No. Activity
Site Scrap Identification and Disposal
1 Declared By User Departments
2 Ageing of the Material( Exceeding Shelf life)
3 Extent of Damage Certified by User
4 Site Shall return the Scrap Material through Prescribed format – Scarp Note
5 Total Scrap details and Quotes shall be forwarded to HO through Project Manager for
Disposal Process
6 Disposal of Hazardous Scrap Like Batteries, Scrap Oil, Chemicals. We need to identify the
Buyers who is having Pollution control Board Certifications
7 HO will Release sale order by collecting the Total value from the Buyer. Release of Scrap
will be done in presences of HO Representative, Site Accountant, Site Stores, Site
Planning and Execution Authorized persons

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Purchase Requisition Samples

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Purchase Requisition Samples

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Purchase Requisition Samples

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CONCLUSION
Material management is an important management tool which will be very useful
& also make the working atmosphere healthy in any type of organization.
Even a common man must know the basics of material management so that he can
get the best of the available resources and make it a habit to adopt the principles of
material management in all our daily activities

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Supply Chain Management (SCM)