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procurement supply chain.pptx
- 1. INTODUCTION OF SUPPLYCHAIN Supply Chain Management Process Planning Logistics Management Manufacturing Technology Product Lifecycle Management Enterprise Asset Management Supply Chain Procurement
- 2. SUPPLY CHAIN • ASupply Chain Is A Network Between A Company And Its Suppliers To Produce And Distribute A Specific Product Or Service. The Entities In The Supply Chain Include Producers, Vendors, Warehouses, Transportation Companies, Distribution Centers, And Retailers. • Supply Chain Management (Scm) Is The Oversight Of Materials, Information And Finances As They Move In A Process From Supplier To Manufacturer To Wholesaler To Retailer And Then To The Consumer. The Three Main Flows Of The Supply Chain Are The Product Flow, The Information Flow And The Finances Flow. These Occur Across Three Main Stages: Strategy, Planning And Operation. SCM Involves Coordinating And Integrating These Flows Both Within And Among Companies.
- 3. STAGES IN SUPPLY CHAIN Customers Retailer Wholesalers Manufacturers Raw Material Suppliers
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- 6. Procurement Management Procurement includessourcing, obtaining and paying for goods and services. Supply chain management also covers the logistics involved in obtaining goods, such as shipping and warehouse management, as well as transforming the procured goods into products and distributing them to customers.
- 7. ROLE OF PROCUREMENT IN SUPPLYCHAIN Procurement managers, also known as purchasing managers, manage a company's sourcing capabilities and supply chain. They are responsible for strategizing and negotiating with suppliers and vendors in order to acquire the most cost-effective deals and to reduce procurement expenses. The task of buying products or services and ensuring that suppliers comply with legal and company policies. Procurement may involve the management of internal processes such as adding new suppliers and ensuring they are compliant. A key aspect of a role within supply chain and procurement is supplier relations.
- 8. Procurement Management InSupply Chain Procurement management is responsible for overseeing all the processes involved in acquiring the products, materials, goods and services needed for efficient business operations. Depending on the business and industry, the terms “sourcing,” “purchasing” and “procurement” may be used interchangeably to describe the function of procuring supplies and managing the process, with sourcing considered more strategic, and purchasing and procurement used to refer to the actual operational function. Organizations across all industries depend on the expertise of procurement management in seeking out and managing external supplier relationships to ensure these needed items are acquired at the best possible cost. For these reasons, procurement management has a direct impact on an organization’s bottom line and strategic business operations.
- 9. BENEFITS OF PROCUREMENTIN SUPPLY CHAIN Supply Chain Risk Reduction Improved customer satisfaction Cost reduction Improved flexibility Improved supplier relationships
- 10. Example of Procurement in SupplyChain If a company needs a new supplier to provide an ongoing service for an indefinite period of time — such as an email security solution — the procurement process helps the company choose the supplier that best meets all of the business’s requirements at a reasonable price. It enables the business to avoid wasting time, money and valuable resources dealing with an inadequate supplier.
- 11. PROCUREMENT KEY ISSUES Pandemicinitiatives Risk management Sustainability Diversity Working capital Innovation Digitalisation projects
- 12. PANDEMIC INITIATIVES Procurement hasgained significant chigh-speny it has managed sourcing, supply chains, stakeholders, and suppliers during the pandemic. It is now time to revisit all category strategies and update them to reflect the changes that have taken place.
- 13. RISK MANAGEMENT The pandemic hashighlighted the inadequacies of previous risk management activities. The focus now needs to be on a broader scope of risks. The top five concerns are: Financial stability of critical and high-spend suppliers Issues that may cause reputational damage concerns Breaches of GDPR and other data protection/security regulations Supply chain certainty Bribery and corruption
- 14. SUSTAINABILITY Sustainability concerns haveevolved into an increasing global interest in issues of economic, social and corporate governance (ESG). The top five issues are Ethical and sustainable sourcing Prevention of bribery and corruption Human capital practices including modern day slavery Reduction of energy and water use Reduction of CO2 emissions.
- 15. INNOVATION By buildingrelationships with suppliers, procurement has a unique external perspective to tease out and encourage innovation. Some organisations have begun to implement a reduced or ‘lite’ version of their terms and conditions, which is more suitable for encouraging start-up suppliers in the market. To embed innovation in the procurement process, action can be taken in the following four areas: 1. Organisational alignment throughout the procurement process 2. Early market engagement, with action that is transparent, honest and fair, as well as clear instructions on how to manage information, communication and intellectual property 3. Early supplier engagement at the sourcing stage, building on information gained from the early market engagement activity 4. Innovation support activities: pilot projects, inducements and rewards, risk sharing, briefings/seminars/workshops, and unsolicited proposals.
- 16. DIVERSITY Diversity has beena hot topic in the US for some time, but more recently it is finding its way onto the agenda in the Europe and APAC regions. Procurement is supporting the business by establishing a level playing field for diverse suppliers to compete with other suppliers. This encourages innovation into the business. The current challenge is identifying those suppliers who meet the diversity criteria, particularly when there is no mandatory policy for suppliers to identify their diverse status within company reports and accounts, or other publicly-available business documents.
- 17. WORKING CAPITAL Manyorganization's are adapting their policies for payment terms so agreements are optimized with suppliers. Rather than lengthening payment terms, options for supply chain financing and implementing an invoice discounting process are being negotiated. It is important to protect the supply base to ensure continuous trading. Resolving and agreeing terms through careful relationship management remains the most effective approach when seeking to maintain working capital.
- 18. DIGITISATION PROJECTS After buildingcredibility during the pandemic, now is a good time to justify investment in systems and tools to improve efficiency. Organisations are investing in: 1. Cloud-based applications 2. Systems that sit on top of company ERP platforms to cover risk, supplier relationship management and other procurement-specific requirements 3. Robotic process automation 4. Data visualisation tools 5. Catalogues to manage tail spend.
- 19. IMPORTANCE OF PROCUREMENT MANAGEMENT Withoutprocurement, it would be impossible for most business operations to function. Procurement management ensures that all items and services are properly acquired so that projects and processes can proceed efficiently and successfully. More than a business necessity, procurement can be leveraged as a competitive advantage when optimized to save money, time and resources. But driving down costs by avoiding delays and errors and maximizing resources is just part of the reason procurement management plays an important role in a company’s bottom line.
- 20. CONCLUSION • It ShouldBe Kept In Mind, However, That This Procurement Management System Must Run Efficiently And Smoothly For All Benefits To Be Reaped. The Key To This Would Therefore Be An Efficient System As Well As The Right Supplier And Resources. • For The Purpose Of Procurement Management, There Should Be A Team Of Highly Trained Individuals, If Procurement Management Plays A Key Role. • As An Example, A Hospital Should Have A Dedicated Procurement Team And Should Employ Strong Procurement Management Techniques And Tools.