This is procurement strategy article for purchasing professionals
Deep dive in the strategic approach in the business function of purchase.and sourcing activities.
The document discusses conducting an industry and competitor analysis. It provides an overview of what industry analysis involves, including reviewing economic, political and market factors that influence industry development. It also outlines Porter's five forces model for analyzing industry competition and lists the major factors considered in an industry analysis. The document then defines what a competitor analysis is and provides details on identifying competitors, sources of information, Porter's framework, and steps to conduct a competitor analysis.
The document discusses the objectives and procedures of purchasing functions. The basic objective is to ensure continuous supply of materials at reduced costs by focusing on the right source, quality, quantity, price, time, attitude and terms. The purchasing procedures include issuing requisitions, reviewing needs, examining budgets, sending requests for quotes, selecting vendors, ordering, receiving goods, and supplementary functions like shipping products. Centralized purchasing involves procuring all materials through a single department headed by one responsible person accountable to top management. Specialized purchasing methods include blanket orders, stockless buying, systems contracting, small orders, and purchases under petty cash or phone orders.
Significance of Procurement Research - Arancajackmethyu
Large organizations are shifting their focus toward developing a procurement strategy based on detailed procurement research. Procurement research, including detailed insights on the current and future market trends, allows organizations to manage supply chain risks, as well as achieve operational efficiency. The business landscape is highly competitive and in order to succeed every business needs to ensure that it has a well-defined plan. An important aspect of planning is procurement, and procurement research is a critical element of this process.
https://www.aranca.com/procurement-research/overview
The document discusses key aspects of materials management including purchasing, transportation, storage, and global sourcing. It describes how materials management encompasses functions beyond just MRP like purchasing, warehousing, and distribution. It also discusses trends towards sourcing models and the importance of handling materials and choosing transportation. Purchasing is a major focus as it relates to cost control and value-based decisions. Just-in-time purchasing supports JIT production but requires long term supplier partnerships and collaboration. Global sourcing involves coordinated cross-border efforts but faces political and customs barriers.
Demand forecasting involves using past demand information to predict future demand. It is important for production planning, acquiring supplies, financial planning, pricing strategies, and advertising. Both qualitative and quantitative techniques are used. Qualitative techniques like expert opinion and surveys are used when little historical data exists, while quantitative time series analysis of trends, seasons, cycles, and random variations is used for existing products. Forecasting allows production to match demand and helps businesses plan effectively.
A presentation on demand forecasting ,explaining its meaning ,levels of demand forecasting , Techniques ,Factors , Benefits , and a small case study on Cadbury India ltd on Demand Forecasting
This document discusses demand forecasting. It defines demand forecasting as predicting future demand. The objectives of demand forecasting are to aid both short-term planning like production scheduling, and long-term planning like capacity expansion. Common techniques for demand forecasting include surveys of consumers to predict future consumption, opinion polls of industry experts, and statistical methods that analyze historical demand trends. The document also discusses factors that influence demand and the various competitive forces that impact businesses according to Porter's five forces model.
The document outlines the purchase cycle process used by companies. It involves 7 main steps: 1) receiving and analyzing purchase requisitions, 2) selecting suppliers and requesting quotations, 3) determining the right price, 4) issuing purchase orders, 5) following up on deliveries, 6) receiving and accepting goods, and 7) approving invoices for payment. The goal of the purchasing process is to obtain the required goods and services at the lowest possible cost, best service, and on time, while maintaining supplier relationships. The case study then provides an example purchase process used by an Indian welded wire mesh manufacturer.
The document discusses conducting an industry and competitor analysis. It provides an overview of what industry analysis involves, including reviewing economic, political and market factors that influence industry development. It also outlines Porter's five forces model for analyzing industry competition and lists the major factors considered in an industry analysis. The document then defines what a competitor analysis is and provides details on identifying competitors, sources of information, Porter's framework, and steps to conduct a competitor analysis.
The document discusses the objectives and procedures of purchasing functions. The basic objective is to ensure continuous supply of materials at reduced costs by focusing on the right source, quality, quantity, price, time, attitude and terms. The purchasing procedures include issuing requisitions, reviewing needs, examining budgets, sending requests for quotes, selecting vendors, ordering, receiving goods, and supplementary functions like shipping products. Centralized purchasing involves procuring all materials through a single department headed by one responsible person accountable to top management. Specialized purchasing methods include blanket orders, stockless buying, systems contracting, small orders, and purchases under petty cash or phone orders.
Significance of Procurement Research - Arancajackmethyu
Large organizations are shifting their focus toward developing a procurement strategy based on detailed procurement research. Procurement research, including detailed insights on the current and future market trends, allows organizations to manage supply chain risks, as well as achieve operational efficiency. The business landscape is highly competitive and in order to succeed every business needs to ensure that it has a well-defined plan. An important aspect of planning is procurement, and procurement research is a critical element of this process.
https://www.aranca.com/procurement-research/overview
The document discusses key aspects of materials management including purchasing, transportation, storage, and global sourcing. It describes how materials management encompasses functions beyond just MRP like purchasing, warehousing, and distribution. It also discusses trends towards sourcing models and the importance of handling materials and choosing transportation. Purchasing is a major focus as it relates to cost control and value-based decisions. Just-in-time purchasing supports JIT production but requires long term supplier partnerships and collaboration. Global sourcing involves coordinated cross-border efforts but faces political and customs barriers.
Demand forecasting involves using past demand information to predict future demand. It is important for production planning, acquiring supplies, financial planning, pricing strategies, and advertising. Both qualitative and quantitative techniques are used. Qualitative techniques like expert opinion and surveys are used when little historical data exists, while quantitative time series analysis of trends, seasons, cycles, and random variations is used for existing products. Forecasting allows production to match demand and helps businesses plan effectively.
A presentation on demand forecasting ,explaining its meaning ,levels of demand forecasting , Techniques ,Factors , Benefits , and a small case study on Cadbury India ltd on Demand Forecasting
This document discusses demand forecasting. It defines demand forecasting as predicting future demand. The objectives of demand forecasting are to aid both short-term planning like production scheduling, and long-term planning like capacity expansion. Common techniques for demand forecasting include surveys of consumers to predict future consumption, opinion polls of industry experts, and statistical methods that analyze historical demand trends. The document also discusses factors that influence demand and the various competitive forces that impact businesses according to Porter's five forces model.
The document outlines the purchase cycle process used by companies. It involves 7 main steps: 1) receiving and analyzing purchase requisitions, 2) selecting suppliers and requesting quotations, 3) determining the right price, 4) issuing purchase orders, 5) following up on deliveries, 6) receiving and accepting goods, and 7) approving invoices for payment. The goal of the purchasing process is to obtain the required goods and services at the lowest possible cost, best service, and on time, while maintaining supplier relationships. The case study then provides an example purchase process used by an Indian welded wire mesh manufacturer.
The document discusses different hypotheses and approaches for forecasting prices, including the efficient market hypothesis (EMH) and inefficient market hypothesis (IMH). The EMH believes prices cannot be accurately predicted, while the IMH believes they can using techniques like fundamental analysis and technical analysis. Fundamental analysis examines supply and demand factors to predict price movements, while technical analysis studies past price patterns.
There are two principal methods of purchasing: informal open-market buying and formal competitive bid buying. The selection of a method depends on factors like institutional policies, organization size, available funds, vendor locations, and delivery frequency. Informal buying involves daily/weekly price quotations from approved vendors and placing orders based on price and quality. Formal bidding requires written item specifications and quantities submitted to vendors, who return sealed bids that are later awarded based on best price and quality. Variations include cost-plus, prime vending, blanket purchase agreements, and just-in-time purchasing.
Combining risk information and criticality data derived from determining the impact enables urgent needs for action to be identified so that risks can be addressed in a proactive manner using appropriate measures, thereby ensuring the success of the company. Read more about the step-by-step approach, and conceptual and organizational implementation of risk assessment!
091023b Acca Unlocking Innovation Through ProcurementDr Gordon Murray
The document discusses procurement processes and how to unlock innovation through procurement. It outlines the typical commissioning and purchasing cycles which include identifying needs, developing business cases, supplier appraisal, and contract management. It then provides recommendations for how to encourage innovation such as setting innovation as an objective, using cross-functional teams, accepting variants, and sharing risks and rewards with suppliers. The overall aim is to utilize procurement strategies to increase capacity and innovation in public services.
You can buy this here: http://imojo.in/27gu1t
This ebook is aimed at helping small and medium businesses in their Purchase Management. The module starts with an introduction to the function, Roles and Responsibilities of executives in the function, Key tools and methodologies, covering ABC Analysis, Various Ordering Techniques like Re-Order Level & Two Bin System and various templates for MIS analysis.
Monitoring of latent risks and an early warning system for events enable prompt implementation of appropriate preventive measures in a crisis situation. These predefined actions, together with quicker crisis response time and assessment of the criticality can save costs and time. Read more about the step-by-step approach, and conceptual and organizational implementation of risk identification!
This document discusses techniques for managing supplier relationships in procurement and supply chains. It covers classifying commercial relationships using portfolio analysis, assessing relationships based on supply risk factors, and positioning supplies and suppliers using tools like the Kraljic portfolio model. The document also explains techniques for supplier relationship management, development, and relationship improvement such as Pareto analysis, supplier preferencing models, and managing relationships based on a supplier's strategic potential and attractiveness as a customer.
This document discusses demand forecasting techniques used by product managers. It defines demand forecasting as using statistical data and market determinants to predict future demand. There are two types of forecasts: passive, which assume no changes to company actions, and active, which account for likely changes. Short term forecasts relate to periods under a year and are used for production, sales, pricing and target policies. Long term forecasts cover multiple years and are used for business, workforce and financial planning. The document outlines various demand forecasting techniques including consumer and opinion polls, market experiments, and analytical methods.
AN OPTIMIZING INTEGRATED INVENTORY MODEL WITH INVESTMENT FOR QUALITY IMPROVEM...IJITCA Journal
This paper presents a vendor-buyer integrated inventory model. This paper considers the problem of a vendor and buyer integrated production inventory model for the vendor and the buyer optimization model
under quality improvement investment and setup cost reduction in the production system such that the total
profit is maximized. The relationship between demand and price is considered as a linear. Entirety profit is
the supply chain presentation calculate and it is calculated as the dissimilarity among revenue from sales
and total cost, where the last is the sum of the vendor’s and buyer’s setup/order and inventory holding
costs, opportunity in setup cost and opportunity investment cost. This manuscript efforts to conclude the
optimal production run time and capital investments in setup cost reduction and process quality
improvement for production system such that the total profit is maximized. The main focus for this paper is
the setup cost reduction and investment for quality improvement. The proposed model is based on the
integrated total profit for both buyer and vendor which find out the optimal value of order quantity,
opportunity investment cost for quality improvement and setup cost reduction. The solution procedure is
developed in order to find the total profit of the vendor and the buyer which is to be maximized. To conclude, a numerical example is given to demonstrate the solution procedure.
This document discusses demand forecasting techniques. It describes short term and long term demand forecasting and their objectives. Short term forecasting relates to periods under a year and is used for production, sales, pricing and target policies. Long term forecasting refers to forecasts over longer periods for business, manpower and financial planning. Demand forecasting requires market research, data analysis, coordination and management decisions. Key techniques include surveys, opinion polls, market studies and experiments.
This document discusses demand forecasting. It describes demand forecasting as estimating future demand under constraints. There are short, medium, and long term forecasts. Factors that influence forecasts include the time period, purpose, forecasting methods, product type, and competition. Good forecasting methods are accurate, durable, available, and economical. Common methods are survey methods like consumer surveys and statistical methods like time series analysis and regression. Time series analysis examines trends, seasons, business cycles, and random variations. Forecasting consumer durables is difficult due to changing demographics and market saturation.
The document discusses logistics management and supply chain management. It defines logistics management as planning and implementing effective movement and storage of goods and information from origin to destination to meet customer demands. The key objectives of logistics management are reducing costs, improving customer service, increasing sales, and establishing competitive advantages. The document also discusses international marketing, supply chain trends, third-party logistics, and fourth-party logistics.
The document discusses the purchasing department and its functions. It notes that the purchasing department is responsible for acquiring necessary materials, minimizing costs, evaluating and approving vendors, tracking orders, and checking invoices. The goal of the purchasing department is to obtain high quality materials at the lowest cost while maintaining good vendor relationships. It also discusses different forms of purchasing departments and the purchasing process.
Demand forecasting involves anticipating future demand for a company's products and services under uncertain competitive conditions. It is essential for production planning, purchasing raw materials, and other business decisions. Demand can be forecasted qualitatively using opinion surveys of consumers, salespeople, and experts, or quantitatively using statistical techniques like trend projection, regression analysis, and econometrics that analyze historical demand data and its relationships to economic indicators. Accurate demand forecasting is important for production planning, inventory control, sales forecasting, budgeting, and long-term growth strategies.
Basic Procurement Principle is the module taught at College of Business and Management (CBM-TZ) to all scholars undertaking Basic Technician Certificate in Procurement and Supplies Management
With the rapidly growing business environment, the demand for purchasing officers is also rising in every business sector. Boosting the efficiency of your procurement will result in cost savings to your organization.
Perhaps, the procurement manager shall apply straightforward attributes and strategies with a specific end goal to procure goods at lower rates.
Here are some of the tips we would recommend if you are looking for solutions to boost your procurement efficiency.
By: https://mavenvista.com/
Strategic Role of Purchasing
Purchasing Portfolio
Supplier Selection
Customer Centric Supply Chain
Supply Chain Management
Supply Chain Management in the 21st Century
Research Topics in Supply Chain Management
This document discusses tools and techniques for analyzing global supply chains, including benchmarking. Benchmarking involves measuring performance against other organizations to identify best practices and opportunities for improvement. It describes the main types of benchmarking and the benchmarking process. The document also discusses determining metrics to measure supply chain performance and categories of measurement, such as quantity, quality, cost, and time. Finally, it covers regulatory influences on global supply chains like taxation and efforts to prevent modern slavery.
The document discusses sourcing strategies and the sourcing process. It describes tactical sourcing as relating to lower level procurement decisions on routine items, while strategic sourcing involves top level decisions on high value items critical to business strategy. The sourcing process involves identifying, selecting and developing suppliers. Sourcing strategies are determined using the Kraljic matrix which categorizes items based on financial and supply risk. Sole sourcing and single sourcing are discussed as strategies, with sole sourcing occurring when only one supplier exists and single sourcing selecting one supplier from multiple options.
The document discusses different hypotheses and approaches for forecasting prices, including the efficient market hypothesis (EMH) and inefficient market hypothesis (IMH). The EMH believes prices cannot be accurately predicted, while the IMH believes they can using techniques like fundamental analysis and technical analysis. Fundamental analysis examines supply and demand factors to predict price movements, while technical analysis studies past price patterns.
There are two principal methods of purchasing: informal open-market buying and formal competitive bid buying. The selection of a method depends on factors like institutional policies, organization size, available funds, vendor locations, and delivery frequency. Informal buying involves daily/weekly price quotations from approved vendors and placing orders based on price and quality. Formal bidding requires written item specifications and quantities submitted to vendors, who return sealed bids that are later awarded based on best price and quality. Variations include cost-plus, prime vending, blanket purchase agreements, and just-in-time purchasing.
Combining risk information and criticality data derived from determining the impact enables urgent needs for action to be identified so that risks can be addressed in a proactive manner using appropriate measures, thereby ensuring the success of the company. Read more about the step-by-step approach, and conceptual and organizational implementation of risk assessment!
091023b Acca Unlocking Innovation Through ProcurementDr Gordon Murray
The document discusses procurement processes and how to unlock innovation through procurement. It outlines the typical commissioning and purchasing cycles which include identifying needs, developing business cases, supplier appraisal, and contract management. It then provides recommendations for how to encourage innovation such as setting innovation as an objective, using cross-functional teams, accepting variants, and sharing risks and rewards with suppliers. The overall aim is to utilize procurement strategies to increase capacity and innovation in public services.
You can buy this here: http://imojo.in/27gu1t
This ebook is aimed at helping small and medium businesses in their Purchase Management. The module starts with an introduction to the function, Roles and Responsibilities of executives in the function, Key tools and methodologies, covering ABC Analysis, Various Ordering Techniques like Re-Order Level & Two Bin System and various templates for MIS analysis.
Monitoring of latent risks and an early warning system for events enable prompt implementation of appropriate preventive measures in a crisis situation. These predefined actions, together with quicker crisis response time and assessment of the criticality can save costs and time. Read more about the step-by-step approach, and conceptual and organizational implementation of risk identification!
This document discusses techniques for managing supplier relationships in procurement and supply chains. It covers classifying commercial relationships using portfolio analysis, assessing relationships based on supply risk factors, and positioning supplies and suppliers using tools like the Kraljic portfolio model. The document also explains techniques for supplier relationship management, development, and relationship improvement such as Pareto analysis, supplier preferencing models, and managing relationships based on a supplier's strategic potential and attractiveness as a customer.
This document discusses demand forecasting techniques used by product managers. It defines demand forecasting as using statistical data and market determinants to predict future demand. There are two types of forecasts: passive, which assume no changes to company actions, and active, which account for likely changes. Short term forecasts relate to periods under a year and are used for production, sales, pricing and target policies. Long term forecasts cover multiple years and are used for business, workforce and financial planning. The document outlines various demand forecasting techniques including consumer and opinion polls, market experiments, and analytical methods.
AN OPTIMIZING INTEGRATED INVENTORY MODEL WITH INVESTMENT FOR QUALITY IMPROVEM...IJITCA Journal
This paper presents a vendor-buyer integrated inventory model. This paper considers the problem of a vendor and buyer integrated production inventory model for the vendor and the buyer optimization model
under quality improvement investment and setup cost reduction in the production system such that the total
profit is maximized. The relationship between demand and price is considered as a linear. Entirety profit is
the supply chain presentation calculate and it is calculated as the dissimilarity among revenue from sales
and total cost, where the last is the sum of the vendor’s and buyer’s setup/order and inventory holding
costs, opportunity in setup cost and opportunity investment cost. This manuscript efforts to conclude the
optimal production run time and capital investments in setup cost reduction and process quality
improvement for production system such that the total profit is maximized. The main focus for this paper is
the setup cost reduction and investment for quality improvement. The proposed model is based on the
integrated total profit for both buyer and vendor which find out the optimal value of order quantity,
opportunity investment cost for quality improvement and setup cost reduction. The solution procedure is
developed in order to find the total profit of the vendor and the buyer which is to be maximized. To conclude, a numerical example is given to demonstrate the solution procedure.
This document discusses demand forecasting techniques. It describes short term and long term demand forecasting and their objectives. Short term forecasting relates to periods under a year and is used for production, sales, pricing and target policies. Long term forecasting refers to forecasts over longer periods for business, manpower and financial planning. Demand forecasting requires market research, data analysis, coordination and management decisions. Key techniques include surveys, opinion polls, market studies and experiments.
This document discusses demand forecasting. It describes demand forecasting as estimating future demand under constraints. There are short, medium, and long term forecasts. Factors that influence forecasts include the time period, purpose, forecasting methods, product type, and competition. Good forecasting methods are accurate, durable, available, and economical. Common methods are survey methods like consumer surveys and statistical methods like time series analysis and regression. Time series analysis examines trends, seasons, business cycles, and random variations. Forecasting consumer durables is difficult due to changing demographics and market saturation.
The document discusses logistics management and supply chain management. It defines logistics management as planning and implementing effective movement and storage of goods and information from origin to destination to meet customer demands. The key objectives of logistics management are reducing costs, improving customer service, increasing sales, and establishing competitive advantages. The document also discusses international marketing, supply chain trends, third-party logistics, and fourth-party logistics.
The document discusses the purchasing department and its functions. It notes that the purchasing department is responsible for acquiring necessary materials, minimizing costs, evaluating and approving vendors, tracking orders, and checking invoices. The goal of the purchasing department is to obtain high quality materials at the lowest cost while maintaining good vendor relationships. It also discusses different forms of purchasing departments and the purchasing process.
Demand forecasting involves anticipating future demand for a company's products and services under uncertain competitive conditions. It is essential for production planning, purchasing raw materials, and other business decisions. Demand can be forecasted qualitatively using opinion surveys of consumers, salespeople, and experts, or quantitatively using statistical techniques like trend projection, regression analysis, and econometrics that analyze historical demand data and its relationships to economic indicators. Accurate demand forecasting is important for production planning, inventory control, sales forecasting, budgeting, and long-term growth strategies.
Basic Procurement Principle is the module taught at College of Business and Management (CBM-TZ) to all scholars undertaking Basic Technician Certificate in Procurement and Supplies Management
With the rapidly growing business environment, the demand for purchasing officers is also rising in every business sector. Boosting the efficiency of your procurement will result in cost savings to your organization.
Perhaps, the procurement manager shall apply straightforward attributes and strategies with a specific end goal to procure goods at lower rates.
Here are some of the tips we would recommend if you are looking for solutions to boost your procurement efficiency.
By: https://mavenvista.com/
Strategic Role of Purchasing
Purchasing Portfolio
Supplier Selection
Customer Centric Supply Chain
Supply Chain Management
Supply Chain Management in the 21st Century
Research Topics in Supply Chain Management
This document discusses tools and techniques for analyzing global supply chains, including benchmarking. Benchmarking involves measuring performance against other organizations to identify best practices and opportunities for improvement. It describes the main types of benchmarking and the benchmarking process. The document also discusses determining metrics to measure supply chain performance and categories of measurement, such as quantity, quality, cost, and time. Finally, it covers regulatory influences on global supply chains like taxation and efforts to prevent modern slavery.
The document discusses sourcing strategies and the sourcing process. It describes tactical sourcing as relating to lower level procurement decisions on routine items, while strategic sourcing involves top level decisions on high value items critical to business strategy. The sourcing process involves identifying, selecting and developing suppliers. Sourcing strategies are determined using the Kraljic matrix which categorizes items based on financial and supply risk. Sole sourcing and single sourcing are discussed as strategies, with sole sourcing occurring when only one supplier exists and single sourcing selecting one supplier from multiple options.
supply chain management in hospitality and tourism industryMerlynCasem
The document discusses supply chain operations, focusing on planning and sourcing. It covers key concepts like demand forecasting, aggregate planning, inventory management, procurement, and credit/collections. The objectives are to gain understanding of activities involved in supply chain planning and sourcing, as well as basic concepts in demand forecasting, inventory management, procurement, and credit/collections. The document provides details on various forecasting methods, types of inventory, procurement activities, and credit/collection activities.
The document discusses procurement strategy and characterizes procurement items into four categories based on risk and expenditure: 1) Routine items with low risk and low spend, 2) Leverage items with low risk and high spend, 3) Bottleneck items with high risk and low spend, and 4) Strategic items with high risk and high spend. For each category, the document outlines the main characteristics and provides examples of potential operational strategies to manage procurement in that area. These include minimizing costs, establishing long-term agreements, developing alternative suppliers, and maintaining close communication with key suppliers.
This document summarizes a presentation on using the Kraljic matrix model to develop strategic procurement plans. The model involves 4 steps: 1) classifying purchases into categories based on profit/risk, 2) analyzing the market, 3) determining strategic positioning, and 4) creating action plans. Step 1 involves categorizing items as non-critical, leverage, bottleneck, or strategic. Steps 2-3 assess purchasing power and determine strategic thrusts of exploit, balance or diversify. Step 4 involves creating specific plans under each thrust to reduce costs and risks for important purchased items. Using the full model helps procurement and supply chain teams improve operations and supplier relationships.
Supply Market Analysis for a Competitive Advantage Davi.docxcalvins9
The document provides a detailed guide for conducting a supply market analysis to gain competitive advantage. It outlines key elements that should be examined, including developing a commodity profile, determining cost structures, researching suppliers, and identifying key market indicators. Conducting primary research is emphasized as essential for developing unique insights. Tracking market indicators over time allows anticipating trends to improve sourcing strategies and reduce supply risk. A thorough supply market analysis can help procurement decisions by providing intelligence on market dynamics, the supply base, and optimal times to purchase.
The document discusses different forms of business organization and their key characteristics. It covers sole proprietorship, partnership, joint stock company (private and public limited), cooperative society, and joint Hindu family business.
The three main forms discussed are:
1) Sole proprietorship where one individual owns and manages the business.
2) Partnership where two or more individuals jointly own and operate a business.
3) Joint stock company where a company is formed by shareholders with transferable shares and limited liability. Private and public limited companies are discussed.
The document compares advantages and disadvantages of each form and their legal registration requirements.
This document provides an overview of key concepts in supply chain management from a chapter in a textbook. It discusses:
1) The different phases of supply chains including acquisition, transformation, and distribution and key functions within purchasing, receiving, and supplier certification.
2) The changing role of purchasing from transactional to strategic. Purchasing now focuses on developing long-term supplier relationships and providing strategic information to support make-or-buy decisions.
3) Global sourcing involves more than just international transactions but integrating suppliers worldwide. Effective global sourcing requires executive commitment, rigorous processes, resources, IT integration, and measuring savings.
The document provides an overview of supply chain management. It discusses key aspects of supply chain operations including planning, sourcing, production, and delivery. It also covers topics like forecasting, inventory management, purchasing, and vendor selection. The goal of supply chain management is to satisfy customer demand in a cost-effective manner through effective planning and coordination across various entities in the supply chain.
This document discusses key concepts in supply chain management including demand planning, forecasting, and collaborative planning. It covers:
1. Demand planning involves forecasting independent and dependent demand, and key steps like importing historical data, creating statistical forecasts, and managing forecasts.
2. Forecasting methods include qualitative, time series, causal, and simulation approaches. Multiple forecasting methods are often used to arrive at a combined forecast.
3. Collaborative planning, forecasting, and replenishment (CPFR) involves sharing forecast and business information between supply chain partners to enable automatic replenishment and eliminate excess inventory.
Demand forecasting involves using statistical data and analysis to predict future demand for a product. There are different types of forecasts including short term (less than 1 year), long term, and passive vs active. Short term forecasts help with sales, pricing, and target policies while long term helps with planning. Demand can be forecast at the macro, industry, or firm level. Statistical methods include time series analysis, regression analysis, and smoothing techniques like moving averages and exponential smoothing. Accurate demand forecasting is important for production, inventory, investment, and economic planning.
The document discusses demand forecasting, including its meaning, objectives in the short and long term, types including short, medium and long term forecasting, determinants for different goods, requirements for good forecasting, techniques like consumer surveys and opinion methods, and steps involved in the forecasting process. It provides details on objectives like arranging labor, finances and production, as well as factors that influence demand for different goods and methods for collecting information and opinions to forecast future demand.
Demand forecasting refers to predicting future demand for a company's products using controllable and uncontrollable factors. It involves determining objectives, important sales factors, an appropriate forecasting method, collecting and analyzing data, making assumptions, specific forecasts, and periodic reviews. Common methods include survey methods for short-term forecasts and statistical methods using historical and cross-sectional data for long-term forecasts.
This document discusses supply chain management. It defines key concepts like distribution channels, supply chain elements, and materials, cash, and information flows. It also discusses the current supply chain concept of viewing all activities from raw materials to final customer as a linked chain. Supply chain types can be efficient or effective. A company's supply chain strategy depends on competitive priorities like cost, quality, flexibility, delivery performance, and innovativeness. Vertical integration and outsourcing are also discussed as strategies for managing a supply chain.
The ways of SCM transformation in the main competitive advantage of the companyVladislav Mandryka
Strategic sourcing is a systematic process of analyzing spending data, both internally and externally, to develop an optimal supplier strategy. The goals are to reduce costs, improve quality, increase ROI, and facilitate just-in-time delivery. The classic strategic sourcing process involves 7 steps: 1) identifying commodity groups, 2) developing a sourcing strategy, 3) generating a supplier portfolio, 4) implementing the strategy, 5) managing negotiations, 6) operational integration, and 7) continuous benchmarking and market monitoring. This ensures strategic sourcing remains an ongoing process that adapts to changes in the supply market.
The strategic management process has four main steps: 1) Environmental scanning to analyze internal/external factors, 2) Strategy formulation to determine corporate/business/functional strategies, 3) Strategy implementation by designing organizational structure and allocating resources, and 4) Strategy evaluation by assessing strategies and performance and taking corrective actions. It is a continuous process of appraising the business, industries, competitors, and reassessing strategies to achieve goals. Competitive advantages do not last forever as rivals can eventually duplicate a firm's resources and capabilities over time through developing their own unique strengths.
Materials management is a core supply chain function and includes supply chain planning and supply chain execution capabilities. Specifically, materials management is the capability firms use to plan total material requirements.
Distribution plays a key role within the marketing mix, and the key to success is its successful integration within the mix, ensuring that customers get their products at the right place and at the right time. If the product cannot reach its chosen destination at the appropriate time, then it can erode competitive advantage and customer retention. The purpose of this paper is to explore the best distribution strategy and other factors that help the organization meet customer expectations in respect of delivery and service promises the organization might make.
procurement principles in actionUNIT 2 PIA.pptxBenjamin Bugri
This document discusses methods for assessing organizational procurement needs and the role of stakeholder engagement. It outlines 10 methods for identifying needs, including demand forecasting, market analysis, supplier input, and benchmarking. It emphasizes that stakeholder engagement is essential for gaining insights, aligning needs with objectives, and ensuring requirements are fulfilled. Stakeholders help by understanding user requirements, providing diverse perspectives, building consensus, mitigating risks, and ensuring strategic alignment and legal compliance of identified procurement needs.
Navigating the world of forex trading can be challenging, especially for beginners. To help you make an informed decision, we have comprehensively compared the best forex brokers in India for 2024. This article, reviewed by Top Forex Brokers Review, will cover featured award winners, the best forex brokers, featured offers, the best copy trading platforms, the best forex brokers for beginners, the best MetaTrader brokers, and recently updated reviews. We will focus on FP Markets, Black Bull, EightCap, IC Markets, and Octa.
At Techbox Square, in Singapore, we're not just creative web designers and developers, we're the driving force behind your brand identity. Contact us today.
How to Implement a Strategy: Transform Your Strategy with BSC Designer's Comp...Aleksey Savkin
The Strategy Implementation System offers a structured approach to translating stakeholder needs into actionable strategies using high-level and low-level scorecards. It involves stakeholder analysis, strategy decomposition, adoption of strategic frameworks like Balanced Scorecard or OKR, and alignment of goals, initiatives, and KPIs.
Key Components:
- Stakeholder Analysis
- Strategy Decomposition
- Adoption of Business Frameworks
- Goal Setting
- Initiatives and Action Plans
- KPIs and Performance Metrics
- Learning and Adaptation
- Alignment and Cascading of Scorecards
Benefits:
- Systematic strategy formulation and execution.
- Framework flexibility and automation.
- Enhanced alignment and strategic focus across the organization.
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
How to Implement a Real Estate CRM SoftwareSalesTown
To implement a CRM for real estate, set clear goals, choose a CRM with key real estate features, and customize it to your needs. Migrate your data, train your team, and use automation to save time. Monitor performance, ensure data security, and use the CRM to enhance marketing. Regularly check its effectiveness to improve your business.
HOW TO START UP A COMPANY A STEP-BY-STEP GUIDE.pdf46adnanshahzad
How to Start Up a Company: A Step-by-Step Guide Starting a company is an exciting adventure that combines creativity, strategy, and hard work. It can seem overwhelming at first, but with the right guidance, anyone can transform a great idea into a successful business. Let's dive into how to start up a company, from the initial spark of an idea to securing funding and launching your startup.
Introduction
Have you ever dreamed of turning your innovative idea into a thriving business? Starting a company involves numerous steps and decisions, but don't worry—we're here to help. Whether you're exploring how to start a startup company or wondering how to start up a small business, this guide will walk you through the process, step by step.
The APCO Geopolitical Radar - Q3 2024 The Global Operating Environment for Bu...APCO
The Radar reflects input from APCO’s teams located around the world. It distils a host of interconnected events and trends into insights to inform operational and strategic decisions. Issues covered in this edition include:
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Sourcing Portfolio Analysis
1. Sourcing Portfolio Analysis
Selvan Athishtaraj V
Portfolio Analysis
The technique (known as Kraljic) uses a matrix, which analyses the supply base
according to supplier risk factors: risk relates to exposure to supply failure and
supply market complexity. This will be low in competitive markets for standardised
products and services and high for specialised products and services unique to the
purchasing organisation where there is a limited choice of available suppliers. The
first portfolio matrix was described by Fisher in 1970 and later refined by Kraljic in
1983 and applied to procurement. Portfolio Analysis is now widely used in
identifying optimal strategies for category sourcing at global, regional or local
levels, based on an assessment of two of the most critical factors affecting a supply
market: Sourcing complexity or risk spend impact relative to the buying
organisation’s total spend. By plotting these two elements in a matrix, an overall
strategy can be determined and an action plan developed for each category of spend.
Thus category management becomes proactive rather than reactive.
1 Profile the category – understanding the category is the first step in the process
requiring the collation of demand and usage information; locale, users as well as an
understanding of the processes undertaken.
2 Supply market analysis – is as it says including identification of existing and
potential new global and local suppliers. Involves a detailed review of cost drivers
as well as the risks and opportunities available. It is usual to break down all costs
such as raw material prices, labour, transportation, support, repair and supplier
margins.
3 Develop the strategy – cross functionally determining where and what to buy while
minimising risk and costs is covered in Step 3. This could reveal single or multiple,
make or buy activities to meet demand over the term. It is important to ensure
stakeholders are part of the full process including the final strategy signoff.
4 Select the strategic sourcing process – choosing and using the various tools and
methodologies are primary here. From simple manual or electronic Enquiry and
Quote forms to formal PQQ’s, RFI’s, RFQ’s, RFP’s and e-Auctions are utilised here.
The documents, processes and tools used can be hugely complex, split into numerous
Lots. Key is to ensure Suppliers understand requirements and price accordingly
without it being overly onerous or lengthy. Product or service specifications,
delivery and service requirements, pricing breakdown and legal and financial terms
and conditions as well as evaluation criteria should be included here.
2. 5 Negotiate and select suppliers – create a short list, discard those that fail to meet
relevant criteria. Undertake single or multiple clarification and negotiation rounds
with one or more Supplier. A final selection is usually done by the team and signed
off as per the approval process.
6 Implement and integrate – notify the successful suppliers and implement or fulfil
demand over time or as required. Manage communication and change with the
Supplier.
7 Benchmarking and tracking results – a key element of the sourcing management
process. It is the start of a continuous cycle, starting with benchmarking the current
status, monitoring the results and ensuring that full value is being achieved. Back to
Step 1 to review the supply market again and restart the process in a constantly
evolving marketplace.
Kraljic Portfolio Purchasing Model
The model involves four steps:
1) Purchase classification.
2) Market analysis.
3) Strategic positioning.
4) Action planning
1: Purchase Classification
Start by classifying all of the commodities, components, products, and services to
buy according to the supply risk and potential profit impact of each.
Supply risk is high when the item is a scarce raw material, when its availability
could be affected by government instability or natural disasters, when delivery
logistics are difficult and could easily be disrupted, or when there are few
suppliers.
Profit impact is high when the item adds significant value to the organization's
output. This could be because it makes up a high proportion of the output (for
example, raw fruit for a fruit juice maker) or because it has a high impact on
quality (for example, the cloth used by a high-end clothing manufacturer).
Then mark each item in the appropriate place on the product purchasing
classification matrix shown
1. Product Purchasing Classification Matrix
3. Strategic items (high profit impact, high supply risk).
These items deserve the most attention from purchasing managers. Options include
developing long-term supply relationships, analysing and managing risks regularly,
planning for contingencies, and considering making the item in-house rather than
buying it, if appropriate.
Note that step 3, below, provides detailed options for the best purchasing approach
for these items, after considering other factors.
Leverage items (high profit impact, low supply risk).
Purchasing approaches to consider here include using the full purchasing power,
substituting products or suppliers, and placing high-volume orders.
Bottleneck items (low profit impact, high supply risk).
Useful approaches here include over ordering when the item is available (lack of
reliable availability is one of the most common reasons that supply is unreliable),
and looking for ways to control vendors
Non-critical items (low profit impact, low supply risk).
Purchasing approaches for these items include using standardized products,
monitoring and/or optimizing order volume, and optimizing inventory levels.
2.Market Analysis
Investigate how much power suppliers have, and how much buying power have as
their customer. A good way of doing this is to use Porter's Five Forces analysis .
4. 3.Strategic Positioning
Classify the products or materials identified as "strategic" in Step 1 according to the
supplier and buyer power analysis followed in Step 2. To do this, simply enter each
item in the purchasing portfolio matrix, shown below.
Purchasing Portfolio Matrix
4.Action Plans
Finally, develop action plans for each of the products and materials are need on a
regular basis according to where those items are placed in the matrix
Portfolio Management Solutions for Suppliers
With Supplier Portfolio Management Solutions, supply chain managers can;
Decrease expenditures,
Decrease commercial risks,
Reach new suppliers or evaluate potential suppliers,
Provide legislative harmonization
Prepare top management reporting and other critical duties.
5. Besides, some of the services that can be accessed by portfolio management
solutions are:
Find the risk distribution of the list of suppliers in different industries and
detailed analysis about riskiest suppliers.
Inform regularly about important developments in supplier portfolio and
tendencies.
Measure the expenditure on suppliers by industries and dependency on
these suppliers.
Check the possible risks and opportunities that can arise from this portfolio
with the corporate family tree
Analysing the Procurement Portfolio and Developing a Procurement
Profile
The purpose of analysing the procurement portfolio is to develop a full and
comprehensive picture (procurement profile) of the procurement needs of the
organisation. The first step is to analyse past and projected procurement
expenditure or spend for goods, services and works (spend analysis). The next step
is to analyse the difficulty and risk associated with securing these goods, services
and works (risk analysis). The third step is to develop a procurement profile that
identifies past and projected procurement expenditure and associated levels of risk
in form of a matrix. Finally, appropriate strategies can be developed for each of the
categories of this procurement profile.
Spend analysis
The first question to ask when preparing a spend analysis is whether historic
spending data is a good indicator of future spends. To establish this, it is necessary
to ask various questions such as:
Were there special events affecting the historic spend that will not be repeated,
e.g. a natural disaster or large scale project that caused a large, but temporary
increase in spend?
Are there anticipated special events that will affect future spend, e.g. a forthcoming
large scale project?
Are there events happening in the external environment that are likely to affect the
spend profile, e.g. political or economic changes in the programme country or in
the behaviour of the donor community?
6. Are there strategic organizational issues that are likely to affect spend, e.g. changes
in the funding profile or in the priorities of the organization?
If, as a result of this analysis the conclusion is the historic spend will provide a
reasonably accurate prediction of future spend, the next step is to undertake a
‘spend analysis’.
Analysing procurement spend provides data that can be used as a baseline to
measure improvements, but also to provide reliable data for deciding strategies to
realize short and long term savings. Various tools are available to conduct a spend
analysis, but normally the first step is to download data from the financial management
system, most usually the Accounts Payable. Data should include all invoices that
have passed through the system within the specified time period. This data can
then be analysed using parameters relevant for the particular organization, but
typical parameters could include:
spend and number of transactions per commodity or category
1) Number of suppliers per commodity or category
2) Average purchase order value
3) Total expenditure per supplier
4) Transaction distribution by currency range
5) Spending distribution between main clients
6) Spend and number of transactions per procurement officers
7) Number of procurement officers involved in the transaction per commodity
group.
Special factors
Where special factors may indicate that the historic spend analysis will not be a
good predictor of future spend, in most circumstances it would still be relevant to
conduct a spend analysis and then adjust the results taking into consideration the
special factors.
If there are factors involved that imply that the historic data does not provide any
relevance in predicting future data, then the procurement profile would need to be
constructed by analysing as much data as possible from information on the future
strategies, and activities of the organization such as project plans, budgets and so
on.
The resulting procurement profile should provide as comprehensive a picture as
possible of the actual procurement spend including:
what goods, services and works are purchased and how much is spent on them
7. Comparison of historic spend on each item with the projected spend
how the goods, services and works are purchased?
who the goods, services and works are purchased from
the geographical location of suppliers e.g. local, regional, international.
Risk analysis
Risk analysis should look at the following issues:
how critical the goods, services or works are to the organization
The difficulty and risk associated with securing the goods, services and works.
the risk associated with each commodity or category based on:
1.Risk specific to the goods, services or works
2.Organization related risk
3.Supplier related risk
4.Market related risk.
When analysing supply risk the following key risk factors need to be analysed for
each commodity or category:
a) Nature of the supply market
b) Probability of supply failure
c) Strategic importance to the organization
d) Impact on the organization of supply failure
e) Complexity of the procurement relationship.
Developing the procurement profile and related strategies
Based on the identified level of risk and the relative expenditure for each
commodity or category of spend, the procurement portfolio can be plotted on a
supply procurement matrix as follows:
Procurement matrix
8. below show the four categories of this procurement profile including the main
characteristics of each of these categories.
Characteristics of risk level, spend categories and possible strategies
The typical characteristics of each of these categories and possible strategies for
dealing with them are highlighted in the table below:
Category Typical characteristics Possible strategies
Routine (Low
risk and low
spend)
Usually low value and low volume items.
Represent routine procurement processing.
Typically represent up to 90% of the
organization's suppliers
Often the suppliers are small businesses.
Transaction costs can be greater than the
value of the items themselves.
Generally competitive local supply markets
for these items.
Minimize administrative efforts by:
Procurement at the lowest practical
level (decentralized).
Encouraging local suppliers to view the
organization as a valuable client
resulting in lower transaction costs.
Focussing ordering and payment terms
with suppliers on transaction efficiency
(direct debiting, aggregation of orders,
monthly accounts, payment cards, etc).
Leverage (Low
risk and high
spend)
Commodities commonly used across the
entire organization with high volume.
Total cost reduction and high service
levels from suppliers by:
9. Category Typical characteristics Possible strategies
Represent commodities where there is
potential for reduction of inventory
management, handling and storage costs.
Mature and competitive supply markets.
Markets are served by a few suppliers with
extensive distribution networks.
Establishing automated supplier
interfaces to minimize process related
costs for high volume standard goods;
Ensuring regular management
information reports on the nature of
this expenditure to keep strategic
focus;
Establishing long term agreements to
simplify procurement, coupled with
automated paying systems
Regionalising supply by using local
suppliers that are agents for centralized
arrangements;
Forming collaborative initiatives with
other organizations to build leverage,
target off-peak periods in supply
markets.
Bottleneck
(High risk and
low spend)
Highly specialized goods, services or works.
Procurement is often undertaken by technical
experts rather than procurement
professionals.
Technical specifications are inappropriately
detailed and limit the supply base.
Often there are only a few potential suppliers
Usually there are only a few transactions in
this category.
Reduce the organization's market
vulnerability and to secure ongoing
supply by:
Identifying alternative sources of supply
and/or substitute goods or services.
Holding extra stock where possible
reduces risk.
Developing supplier capabilities and/or
changing demand requirements.
Ensuring long term agreements may
secure supply from key suppliers.
Encouraging new supply participants
into the market;
Considering local supplier development
strategies.
Developing contingency plans to deal
with potential disruptions to supply.
Developing performance or functional
specifications to ensure a wider
sourcing base.
10. Category Typical characteristics Possible strategies
Developing a mixture of technical
expertise and procurement skills to
manage supply.
Strategic (High
risk and high
spend)
Represents goods, services or works that are
critical to the organization.
It is often a complex "bundle" or "package" of
goods and associated services
Requires innovative solutions and high level
expertise from suppliers.
The suppliers' attitude to the organization
(whether or not they consider the
organization valued customers) had a high
impact on the value and quality of the goods,
services or works delivered.
The category represents very few
transactions and there are often very few
suppliers available.
The costs in offering contracts are substantial
for both the procuring organization and the
supplier.
Manage relationship and performance
through regimes and systems which are
essential to secure value for money and
reduce risk by:
Encouraging effective supplier
relationship management for complex
and costly bundles of goods and
services.
Understanding correctly supplier needs
and agree to performance
management criteria and interfaces.
Maintaining regular communication
with suppliers to ensure innovation and
continuous service level improvements.
encouraging local suppliers with an
incentive to deliver long term value
rather than suppliers for which the
business is not significant.
Helping to develop suppliers'
performance levels.
Note: Procurement falling into the leverage, bottleneck and strategic categories
would be considered “significant purchases”.
References:
Coyne, K.P. and Sujit Balakrishnan (1996),Bringing discipline to strategy, The McKinsey
Quarterly, No.4.
Porter, M.E. (March–April 1979) How Competitive Forces Shape Strategy, Harvard
Business Review.
Michael E. Porter, "How Competitive Forces Shape Strategy," May 1979
UN Procurement Practitioner's Handbook
The Purchasing Portfolio, Kraljic, 1983
Vitasek, Kate; Manrodt, Karl B (2012). Vested: How P&G, McDonald's, and Microsoft are
Redefining Winning in Business Relationships (1st ed.). New York: Palgrave
Macmillan. ISBN 978-0230341708.
11. ^ Vitasek, Kate; Ledyard, Mike; Manrodt, Karl B (2012). Vested Outsourcing: Five Rules that
will Transform Outsourcing. New York: Palgrave Macmillan. ISBN 978-1-137-29719-