The document discusses various aspects of procurement management in supply chains. It describes the purchasing cycle which includes requisitioning, approval, ordering, delivery, receipt, and payment. It also discusses inventory models like EOQ, FOIS, and ORS that help determine optimal order quantities. Key concepts covered include market assessment, purchase decisions, traditional inventory management, just-in-time systems, green channel suppliers that directly deliver to assembly lines, and ship-to-line methods. The overall goal of procurement is to acquire quality goods and services in a timely manner at lowest total cost.

1. PROCUREMENT MANAGEMENT IN SUPPLY CHAINTHE FUNDEMENTAL GOAL OF THE PROCUREMENT OR PURCHASING FUNCTION IS TO ACQUIRE OPTIMUM QUALITY AND QUANTITY OF GOODS AND SERVICES FOR THE COMPANY IN A TIMELY MANNER AND AT THE LOWEST TOTAL COST

2. PURCHASING CYCLE Accounting system RequisitioningFinancial approvalPayment Market AssessmentReceipting and Accounting Purchase decisionDeliveryOrdering

3. Market Assessment After the purchasing officer receive an approval a check should be made to insure that the item is not already in stock Is there a competitive market for them Volume of the goods List of suppliers Scope of bulk purchase

4. Purchase decision The choice of suppliers has to be justified under official information act We have to point out or mark the suppliers in order to have cost cutting methods

5. Traditional inventory management Inventory is the physical stock of items that a business or production organization keeps in hand for efficient running of affairs or its production Inventory control technique implies ensuring availability of any materials It assures of adequate supply of goods in order to meet an expected pattern of distribution of demand The objective of inventory control was to provide efficient and smooth service to the customer by minimising the idling of men and machine which may cause due to the sortage to raw material

6. OrderEvery organization need a good system of orderDelivery It must be done in time because it also incurred the cost ReceiptsIt has to be clear procedures need to establish Payment The satisfactory conclusion of a purchasing transaction is payment . It also help us to make good relation with the suppliers

7. Inventory Models EOQ (Economic order quantity)FOIS (Fixed order interval system)FOQS (Fixed order quality system)ORS (operational replenishment)

8. Economic Order Quality It is the level of inventory that minimizes the total inventory holding cost and ordering cost .The model was develop by F F. W . Harris It determines the point at which the combination of order cost and inventory carrying cost are at least It only applies when the demand for the product is constant

9. Assumption of EQM Model Only one product is involve Annual demand requirement knownDemand is even through out the year Lead time does not vary

10. Fixed Order Inventory system This is a periodic review inventory scheme in which we review our inventory regularly such as once a month, and after the review we determine how much to order After our review we order an amount equal to the difference between the maximum level and the amount in hand It is economical

11. Fixed order quality system In this system the basic inventory model is that the order quality is fixed and order or re-order is placed whenever the inventory touches a certain level known as order or reorder post

12. Operational replenishment systemIn this system inventory is reviewed at periodical intervals and if there has been any depletion since the last review an order or reorder is placed The amount ordered is equal to the amount by which a fixed replenishment level exceeds the actual inventory at the time of review

13. Material requirement planning It is a production planning and inventory control system use to manage manufacture process most MRP system are software based but is can also be done by hand USES It ensure material are available for production and product are ready to deliver to the customer

14. Maintain the lowest level of inventory

15. Plan manufacture activity delivery schedule and purchase activity Just in time (JIT)Meeting the customer demand with minimum delay of the good and servicesTaiichiohno was the first to introduce jit in toyota manufacturing units he is also known as father of JITIt reduces the waste and improve the product quality and efficiency of the product

16. Green channel suppliers A green vendor is one who supplies the goods directly to the assembly line for further processing .The suppliers has the information about the product requirement of the organization There is no check or inspection of the goods This type of relation not only reduce the production time but also built a good relation with the suppliers