This document provides an introduction to purchasing and supply chain management. It discusses how increased competition has led organizations to focus more on their supply bases and purchasing functions. The concepts of supply chain management and value chain are introduced. Key terms like purchasing, supply management, and procurement are defined. The document outlines the primary and support activities in a value chain and explains how horizontal integration across the chain can provide benefits. It also discusses the pillars of purchasing/supply strategies and traces the historical evolution of the purchasing function.
This presentation explains 4 Pillars of Supply Chain strategy which every organisation regardless of size need to consider to device the strategic direction of their supply chain.
The 4 Pillars are:
1) People
2) Process
3) Systems
4) Execution.
If you like the presentation please subscribe to my blog muddassirism.com for further updates.
Planning is an ongoing process that happens at different levels and different times dependent on resource availability and this is recognised by the 5 levels of Supply Chain Planning Horizon.
This presentation explains 4 Pillars of Supply Chain strategy which every organisation regardless of size need to consider to device the strategic direction of their supply chain.
The 4 Pillars are:
1) People
2) Process
3) Systems
4) Execution.
If you like the presentation please subscribe to my blog muddassirism.com for further updates.
Planning is an ongoing process that happens at different levels and different times dependent on resource availability and this is recognised by the 5 levels of Supply Chain Planning Horizon.
To effect overall success of an organisation, MRO businesses must be highly integrated and managed with the common goal of assuring availability and reliability at an acceptable cost.
To successfully transform an asset intensive supply chain the following important capabilities are require
- Knowledge of Assets/Parts supply chains, the value drivers and unique planning requirements
- Ability to identify and apply the appropriate strategies to build a business case and identify risks and opportunities
- Experience in developing strategies with appropriate financial and non-financial information
- A deep understanding of the structures and processes required to take organisations from current state to best in class
- An ethos of up-skilling, and experience in lifting organisations capabilities via education, training and coach mentoring
- Ability to model costs, constraints and volumes in a complex environment for inventory, transport and warehousing
- Strong communication and change management experience
We understand asset intensive supply chains have differences to consumer supply chains. We are helping asset intensive businesses evolve to address emerging competitive priorities.
Several approaches exist to identify supply chain performance maturity and address these issues.
GRA is Australia’s premier expert consulting firm specialising in supply chain and logistics strategy, planning and execution.
Find out more www.gra.net.au
Market Logistics & Supply Chain Management
Logistics Defined
Scope of Logistics
Logistics and SCM
The Value Chain
Logistics Focus Areas
Factors Which Drive Inventory
ABC Inventory Analysis
Implement Consulting Group has summarised the strategic levers into five supply chain megatrends.
1.Multiple Supply Chains
2. Move On or Move Home
3. Green and Sustainable Supply Chains
4. Global Supply Chain Risk Management
5. Managing Supply Chain Complexity
SCOR is an acronym for supply chain operations reference model, which was developed to assist businesses in understanding, structuring, and evaluating the performance of supply chains.
This video is presented by USEP's BSCS student Alvin Mark U. Cabeliño under Mr. ND Arquillano as a partial fulfilment for Elective 4 -Supply-Chain Management.
• Material Requirement Planning and Capacity Requirement
• Thought put Time
• Order Cycle Time
• Customer Satisfaction
• Quality
• Specifying Materials
• Maintenance Repair and Operating (MRO) Supplies
• Tooling
To effect overall success of an organisation, MRO businesses must be highly integrated and managed with the common goal of assuring availability and reliability at an acceptable cost.
To successfully transform an asset intensive supply chain the following important capabilities are require
- Knowledge of Assets/Parts supply chains, the value drivers and unique planning requirements
- Ability to identify and apply the appropriate strategies to build a business case and identify risks and opportunities
- Experience in developing strategies with appropriate financial and non-financial information
- A deep understanding of the structures and processes required to take organisations from current state to best in class
- An ethos of up-skilling, and experience in lifting organisations capabilities via education, training and coach mentoring
- Ability to model costs, constraints and volumes in a complex environment for inventory, transport and warehousing
- Strong communication and change management experience
We understand asset intensive supply chains have differences to consumer supply chains. We are helping asset intensive businesses evolve to address emerging competitive priorities.
Several approaches exist to identify supply chain performance maturity and address these issues.
GRA is Australia’s premier expert consulting firm specialising in supply chain and logistics strategy, planning and execution.
Find out more www.gra.net.au
Market Logistics & Supply Chain Management
Logistics Defined
Scope of Logistics
Logistics and SCM
The Value Chain
Logistics Focus Areas
Factors Which Drive Inventory
ABC Inventory Analysis
Implement Consulting Group has summarised the strategic levers into five supply chain megatrends.
1.Multiple Supply Chains
2. Move On or Move Home
3. Green and Sustainable Supply Chains
4. Global Supply Chain Risk Management
5. Managing Supply Chain Complexity
SCOR is an acronym for supply chain operations reference model, which was developed to assist businesses in understanding, structuring, and evaluating the performance of supply chains.
This video is presented by USEP's BSCS student Alvin Mark U. Cabeliño under Mr. ND Arquillano as a partial fulfilment for Elective 4 -Supply-Chain Management.
• Material Requirement Planning and Capacity Requirement
• Thought put Time
• Order Cycle Time
• Customer Satisfaction
• Quality
• Specifying Materials
• Maintenance Repair and Operating (MRO) Supplies
• Tooling
SCM, Value Chain, Objectives of SCM, Importanceprachimba
Supply Chain Management (SCM) refers to the strategic coordination and integration of all activities involved in the sourcing, procurement, production, logistics, and distribution of goods and services. It encompasses the planning and execution of processes to optimize the flow of materials, information, and finances across the entire supply chain network, from raw material suppliers to end customers.
An Organization Should Approach All Tasks With The Idea That They Can Be Accomplished In A Superior Fashion
An organization capability refers to the way systems and people in the organization work together to get things done. The way leaders foster shared mindsets, orchestrate talent, encourage speed of change, collaborate across boundaries, and learn and hold each other accountable define the company's culture and leadership edge.
The firm’s ability to manage people
to gain competitive advantage.
• focuses on internal processes and systems for meeting customer needs
• creates organization-specific competencies that provide competitive advantage since they are unique
• ensures that employee skills and efforts are directed toward achieving organizational goals and strategies
A document issued by a recognized agency, and dealing with design and safety requirements relating to a specific product.
EXAMPLES
The U.S. Occupational Safety and Health Administration (051-IA) and the American National Standards Institute (ANSI).
OSHA standards are generally legally binding for an employer,
while ANSI standards are generally of an advisory nature. set industry standards with input from industry representatives and consumers.
“ Value Chain Analysis (VCA) is a process where a firm identifies its primary and support activities that add to its final product and then analysis to reduce costs or increase differentiation.”
“ Value Chain represents the internal activities a firm engages in when transforming inputs into outputs.”
Organizational Appraisal is the process of monitoring an organization’s internal environment to identify strengths and weaknesses that may influence the firms ability to achieve GOALS. It include identifying strengths and weaknesses.
A document issued by a recognized agency, and dealing with design and safety requirements relating to a specific product.
EXAMPLES
The U.S. Occupational Safety and Health Administration (051-IA) and the American National Standards Institute (ANSI).
OSHA standards are generally legally binding for an employer,
while ANSI standards are generally of an advisory nature. set industry standards with input from industry representatives and consumers.
A measurement of the quality
of an organization's policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.
Value Chain Analysis is a strategy used to analyze the company's internal activities. In other words, by looking at internal activities, the analysis reveals where a company's competitive advantage or deficiencies are.
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Purchasing IBM 206 Ch01
1. Purchasing and Supply Chain
Management
Session 1
Introduction to Purchasing and Supply
Chain Management
1
2. Chapter Overview
The changing world of purchasing and
supply management.
Purchasing’s increased role in this new
world.
Purchasing/supply management terms
defined.
Supply chain management activities.
The pillars supporting supply
management.
The historic evolution of
purchasing/supply management. 2
3. A New Competitive Environment
Increased Competition changes
buyer/seller
balance of power
Evolution of competitive environment:
60’s/70’s
– Marketing strategies capturing loyalty.
– Strong engineering, design, and manufacturing
functions to support market requirements.
– Customers needs translated into products.
– Need for high level quality at a reasonable cost.
– Need for flexibility and responsiveness. 3
4. A New Competitive Environment
Concept of Supply Chain Management
Emerges
Evolution of competitive environment:
80’s
– Need for flexibility and responsiveness
90’s
– Organizations realized materials and service inputs from
suppliers impacted ability to meet customer needs.
– Resulted in increased focus on supply base and 4
purchasing.
5. Why Purchasing is Important
As companies struggle to increase
customer value by improving
performance, many companies are
turning their attention to purchasing
and to supply management.
5
6. Why Purchasing is Important
Results of Good Supply
Management:
Potential for Profitability
Outsourcing
Improved product and service quality
EPI/ESI
6
8. What are Purchasing and
Supply Management?
• Purchasing is a functional
group/activity that supplies the
organization with materials. It is
often referred to as procurement.
• Supply Management is a
progressive approach to managing
supply base and the supply chain.
8
9. What is a Supply Chain?
• A Supply Chain is three or more
organizations linked directly by one
or more upstream or downstream
flows of products, services, finances,
and information from a source to a
customer.
• The Supply Chain is a subset of the
Value Chain.
9
10. Supply Chains
• Simple supply chains pull materials
directly from their origin, process them,
package them, and ship them to
consumers.
Extraction Conversion OEM Distributors Consumer
10
11. What is a Value Chain?
• A value chain is a sequence of
business functions in which utility
(usefulness) is added to products or
services as they move from supplier
to end customer
• Value chains are often viewed like a
river--upstream and downstream
• NOTE: Value Chain discussion draws heavily from
Michael Porter, Competitive Advantage--Creating
and Sustaining Superior Performance
11
13. Primary and Support Activities
• Primary Activities
Inbound logistics
• Includes activities associated with
receiving, storing, and disseminating
inputs to support the product or service,
including transportation, material handling,
warehousing, inventory control, vehicle
scheduling, and returns to suppliers
13
14. Primary and Support Activities
• Primary Activities
Operations
• Activities associated with transforming
inputs into final form, such as machining,
packaging, assembly, equipment
maintenance, testing, printing, and facility
operations
14
15. Primary and Support Activities
• Primary Activities
Outbound logistics
• Includes activities associated with
physically collecting, storing, and
distributing a product or service to
customers, such as finished goods
warehousing, material handling, delivery,
order processing, and scheduling 15
16. Primary and Support Activities
• Primary Activities
Marketing and Sales
• Includes activities associated with
providing a means to which buyers can
purchase the product and inducing them
to do so, such as advertising,
promotion, sales force efforts, job
quoting, channel selection, channel
relations, and pricing
16
17. Primary and Support Activities
• Primary Activities
Service
• Includes activities associated with
providing service to enhance or
maintain the value of the product, such
as installation, repair, training, parts
supply, and product adjustment
17
18. Primary and Support Activities
• Primary Activities
• In any firm, all the categories of primary
activities are present to some degree
and play some role
• Key primary activities often differ from
industry to industry
18
19. Primary and Support Activities
• Support Activities
Firm infrastructure
• Consists of a number of activities,
including general management, planning,
government affairs, finance, accounting,
legal, and quality management
• While firm infrastructure is sometimes
viewed as overhead, it can be a powerful
source of competitive advantage
19
20. Primary and Support Activities
• Support Activities
Human resource management
• Consists of activities involved in
recruiting, hiring, training, developing,
and compensating all types of
personnel
20
21. Primary and Support Activities
• Support Activities
Technology Development
• Includes activities typically associated
with MIS, engineering, and R&D and
involve activities that seek to improve
product and processes.
21
22. Primary and Support Activities
• Support Activities
Technology Development
• New product and process development are
primary concerns of technology
development support activities
22
23. Primary and Support Activities
• Support Activities
– Procurement
• Involves activities associated with
identifying, evaluating, selecting,
managing, and developing sources of
supply
23
24. Primary and Support Activities
• Support Activities
– Procurement
– Though purchased inputs are commonly
associated with primary activities,
purchased inputs are present in every
value activity, including support
activities.
24
25. Primary and Support Activities
• Support Activities
-Procurement
– Examples:
» Supplies
» Travel services
» Media
25
26. What is Value Chain
Integration?
• Value chain integration involves
bringing together different groups,
functions, or organizations, either
formally or informally, physically or
by information technology, to work
jointly and often concurrently on a
common business-related
assignment purpose
26
27. Horizontal Integration Across
the Value Chain
• Examples of how firms integrate
across the value chain--
– Committees/groups/teams
– Shared and linked information systems
– Integrated performance
goals/objectives/measures
– Strategy development process
27
28. Horizontal Integration Across
the Value Chain
• Examples of how firms integrate
across the value chain—
– Co-location of personnel within and
between the organization
– Through a process orientation
– Informal or ad hoc exchange of
information
– Shared risk and reward projects
28
31. Relationships within the
Supply Chain
• Organizations are forming partnership
and alliances with others in the supply
chain. These require a shared resource
base so the entire chain can benefit as
a whole.
31
32. The Supply Chain Umbrella
• Encompasses activities that are part of
a network supporting efficient and
effective flow of goods and information
across the supply chain.
• Organizations recognize value of
aligning, coordinating, integrating and
synchronizing these activities.
32
33. The Supply Chain Umbrella
• Supply Chain activities include:
– Purchasing
– Inbound Transportation
– Quality control
– Demand and Supply Planning
– Receiving, Materials Handling, and Storage
– Material or Inventory Control
33
34. The Supply Chain Umbrella
• Supply Chain activities include:
– Order Processing
– Production Planning, Scheduling, and
Control
– Warehousing/Distribution
– Shipping
– Outbound Transportation
– Customer Service
34
35. Four Pillars of Purchasing and Supply Chain Management
Strategies
35
36. Evolution and Development
of Purchasing
• Period One- The early years
• Period Two- Growth of Purchasing
Fundamentals
• Period Three-The War Years
36
37. Evolution and Development
of Purchasing
• Period Four – The Quiet Years
• Period Five- Materials Management
• Period Six – The Global Era
• Period Seven – Supply Chain
Management
37