It is completely related to P2P direct materials strategy.

1. BY
PARISH PATHRABE
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2. 
 Direct materials is the materials which describe in
BOM (Bill of materials)
 For example RM, transportation cost & salary
 Indirect materials is the materials which we consume
and take help of them but not describe in BOM
 For example tools,machinary & equipment
Meaning
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3. 
Classification
Procurement
Fixed Expenses
Salary Depreciation
Variable
Expenses
Direct
Materials
Direct Labour
(Pay as per
hours)
Transportation
Materials
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4. 
Y=mx+c
Where,
 Y=output
 mx=variable expenses
 c=fixed expenses
Equation
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5. 
 In short period(time zone) , fixed expenses are fixed
& variable expenses are variable.
 But in long period (time zone), all (Fixed +Variable)
expenses are variable .
 So you can control your expense in long run process
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6. 
 Vision (long term goal)
 Mission (short term goal)
 Code of conduct
 Core value- it include transparancy policy,gift policy
Every company have
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7. 
 Employees
 Suppliers
 Customers
 Shareholders
 Society
Stackholder
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8. 
Every good company focus or attack on triple
bottom profit line
 Economic profit
 Societal profit
 Environment profit
 In short, we can say that People(Society), Planet
(Environment) & Profit(Economic)
Bottom line
if all profits are in
green,then we consider
as good business
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9. Vision
 Quality & reliabilty
 Product appeal & styling
 Customers satisfaction
 Lowest ownership cost
 Relevant cost with effective technology
 More content at a price point
Mission
 Love the product
Strategy
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10. 
 All strategic model must meet the vision & mission
 Covering all touch points of customers expectation
 Network
 Sales
 Products
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Strategic objective & goal

11. 
 Ability to innovate
 Contemporary styling
 Technology
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Core competencies(Value)

12.  Market share
 Top players
 Competitors
 Product & their price
 Brand image/Customer satifaction/Service
Also focus on current market position,
 Young players
 Sales % of other including domestic also
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Know about the market

13.  Segment gap
 Expand production
 Improve penetration through network
 Satisfaction score
 New market which increase your market share
 Employee engagement (Belongingness)
NOTE:
 Organic growth: By build new plant or new warehouse
 Inorganic growth: By merging or acquire
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Focus on

14. 
 Financial prospective
 Customers/ Market prospective
 HR prospective
 Business prospective
-Quality
-Vendor rating
-Capacity
-Product introduction
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Also focus on
All are internally
connected

15. 
 Acquisition of cutting edge technology through JV,
technology agreement, merger acquisition
 Vendor selection based on strong technology &
management
 Limited vendor is good for the company
 Vendor practice & their benchmark
 Develop healthy vendor base to support
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Sourcing strategy

16. 
 Purchase in bucket manner
 Complexity is high ,suppliers are more
Important terms:
 CKD - Completely Knock Down
 SKD – Semi-complete Knock Down
 SKU – Stock Keeping Unit
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Global purchasing strategy

17. 
 Purchasing from the productcomponent with best
quantity
 Develop advance technology is competative advantage
 Low cost of production
 Economic scale and update technology
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Technology

18. 
For any query ,
parishpathrabe14@gmail.com
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Thank You