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New Directions of Procurement and Supply Chain Management<br />Submitted By<br />Ahmed Ali (860828)<br />Ali Ammara (860657)<br />Ali Dow (862247)<br />Submitted To<br />Prof. David Burnell<br />April,28,2010<br />

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Introduction<br />procurement function is part of logistics system. <br />Procurement is one the important activities of the supply chain. <br />Procurement plays an important role in achieving the organization goal. <br />Buying is an important role in the profit of the organization.<br />

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What is the supply chain planning.<br />Classifications of procurement activities. <br />The role of procurement within business organizations <br />The objectives of procurement and supply <br />The procurement procedures <br />The selection and evaluation of a supplier <br />The benefits and disadvantages of buying <br />The logistical organization of procurement processes <br />Strategy of Logistics <br />

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What is Supply Chain Planning ?<br />Supply Chain is a set of activities (e.g. purchasing,<br />manufacturing, logistics, distribution, marketing) that <br />perform the function of delivering value to end customer<br />Traditionally, all the business units along a supply chain <br />have their own objectives and these are often conflicting <br />There is no single plan to carry out supply chain activities <br />

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Procurement activities <br />Buyback <br />Purchase for consumption or conversion <br />

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The Role of Procurement within Business Organizations <br />The procurement function is one of the business functions<br />The procurement function is required to support the labor productivity.<br />The procurement function play an important role in managing manufacturing abroad.<br />

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Goals of Purchasing and Supply <br />Administrative level <br /><ul><li>Quality

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Amount

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Price

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Time

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Sourcing</li></li></ul><li>Operational / Functional level <br />Material and service flow<br />Wise Purchase<br />Achieve competitive procurement <br />Reduce the stock cost<br />Development of new sources<br />Development of good relations with suppliers <br />

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More detailed level <br />Purchasing policies (manual) <br />Selection of suppliers and awarding contracts <br />Review material specifications and purchase orders <br />Policies on Public Tenders <br />Policies relating to ethical practices <br />

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Procurement Procedures<br />Represents the general framework and direction of the actions .<br />Represent the means to run the input information from outside the organization.<br />Procurement cycle.<br />Feel the need.<br />Check the availability of appropriations.<br />

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Examples-Decisions within the Organization<br />

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Triangle Logistics Strategy<br />Inventory<br />• demand forecasting<br />• Principles of Storage<br />• resolutions of the stock<br />• purchasing decisions and scheduling of supply<br />• Resolutions Storage<br />Customer Service Goals<br />* Product<br />* Logistics service<br />* Information system<br />Transportation<br />• Principles of Transport<br />• resolutions of the Transport<br />location<br />• Location decisions<br />• Logistics network planning process<br />

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Purpose of Procurement<br />Flow of raw materials and services.<br />Level of inventory investment.<br />Level of service. <br />Competitive situation. <br />Goals of the organization.<br />

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How to choose a supplier?<br />14 Steps to choose a supplier: <br />Lead Time<br />Lead time variability<br />Delivery time<br />Delivery time variability<br />Communication<br />Ability to send<br />

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Vendor errors.<br />Maintenance.<br />Quality<br />Price<br />Experience<br />Terms of contract<br />Services after sell<br />Confidential data<br />

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Evaluation of the supplier <br />They are several criteria to measure the performance of suppliers, such as: <br />Effect the price<br />Saving<br />

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Control<br />The material flow<br />Delivery<br />Planning<br />

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Procurement Contracts<br />Procurement contracts recovered<br />Partnership contracts in the flow<br />Contracts amounts<br />

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The Benefits of Purchasing and Supply External<br />Economies of scale <br />Risk reduction <br />Reduce the capital invested <br />Focus on the goal of the organization <br />Increased flexibility<br />

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Disadvantages of Purchasing and Supply the Outer<br />Lack of knowledge of competitors <br />Collision targets <br />A system for integrated logistical<br />

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Logistical Organization of Procurement Processes<br />Structure and control<br />Centralized structure for decision-making.<br />Cost analysis for decision support site.<br />Cost of holding inventory, costs and interest of the process of delay.<br />Re-evaluation of global logistics network.<br />

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Outsourcing from Abroad and to Participate <br /><ul><li>Range of activities in the value chain

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Increased outsourcing

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Strategic decision taken centrally with the monitoring and control in the performance of suppliers.</li></li></ul><li>Logistics Information<br />Global logistics management. <br />Global leadership in the field of business. <br />Time-delay.<br />Quick respond. <br />Information system.<br />

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Consumer choice of suppliers<br />Internet<br />Government Directory<br />International and regional organizations<br />Experience<br />Reputation<br />Competition<br />

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References<br />Chopra, S., & Meindl, P. (2007). Supply Chain Management 3rd edition.<br />