ARSALAN GULZARIMDAD

FARHANRAHEEL

GROUP MEMBERS

Supply Chain Management

“The process of planning, organizing, and controlling the flow of materials, services, and information

from supplier to end user/customer.”

This integrated approach incorporate suppliers, supply management, integrated logistics, and

operations . FARHAN

Procurement and Sourcing Strategies

The Foundations of Supply Chain ManagementSupply Management

Trends

Supplier management, supplier evaluation, supplier certification, strategic partnerships

Operations

Trends

Demand management, MRP, ERP, inventory visibility, JIT (AKA lean production & Toyota Production System), TQM (AKA Six Sigma)

Logistics

Trends

Transportation management, customer relationship management, distribution network, perfect order fulfillment, global supply chains, service response logistics

Integration

TrendsKey process integration, performance measurementSCM required three basic matrix

Quality. Cost.

Service.Integration & operation provide support 3 matrix.

Advantages of Special Department

• Easier to standardize

• Allows room for application of electronic supply systems.

• Development of specialization and expertise.

• Essential for strategic Supply Chain Management

Purchasing

The process of buying; learning the need, locating ad selecting a supplier, negotiating price and other

pertinent terms, and following up to ensure delivery.

• Procurement

• Not limited, but also includes the storage, traffic, receiving, incoming inspection, and salvage.

Material Management

the integration of related materials functions to provide cost –effective delivery of materials and services to the

organization, includes a number of separate groups, such as material planning and control, material and purchasing research, purchasing, inbound traffic, incoming quality

control, inventory control, production scheduling, receiving, stores, in-plant materials movement, and scrap and surplus

disposal.

Others names used for materials management, Integrated Logistic and Supply Chain Management.

IMDAD

Logistic ManagementThe part of SCM that plans, implements, and controls

the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers requirement.

Include the inbound, outbound and external movements.

“The logistic cost can not be controlled if they cannot be traced’’

Inbound --------- Conversion / Operational----------Outbound

Vendors / Suppliers to Plant

Cost incurred for the movement of materials within

plant / production

Movement cost Production facility

to Customers

Customer Service Parts and service support

Demand forecasting/Planning Plant and warehouse site selection

Inventory Management Purchasing

Logistic Communication Return goods handling

Material Handling

Order Processing Traffic and Logistic

Packaging Warehouse storage

Major Logistic Activities

Importance of Decision Making in the Purchasing / Supply Management

The following decision will have a major impact on the organizational goal, final customer, profitability, return on assets,

etc

•Make or Buy

•Price

•Where shall be order place

•Maximum or Minimum Order Size

•Best alternative in case of any emergency

•Transportation mode and Cost considering quality and timely delivery

•Dispose of surplus material

•Reactive and Proactive – Wait or Act now?

Objectives of Purchasing & Supply Management

1. Right Materials2. Right Quantity3. Right Time 4. Right Place5. Right Source6. Right Service7. Right Price

ARSALAN

The essential steps in the Purchasing Process

SupplyMgmt

ProductionCustomer

ServiceShipping

IdentifyRequirements

EstablishSpecifications

AssessSuppliers

SelectSupplier(s)

IssuePurchase

Order

Follow-Up& Expedite

Receive &Verify

ProcessPayment

MaintainRecords

Purchasing Process

CustomerDemand

ProductionSchedule

The essential steps in the Purchasing Process

SupplyMgmt

ProductionCustomer

ServiceShipping

IdentifyRequirements

EstablishSpecifications

AssessSuppliers

Purchasing Process

CustomerDemand

ProductionSchedule

– Direct and Indirect

– Industry specific

– MRO ( Maintenance repair operation)

.

– Material Requisitions

.

– MRP Output

– Material requirements planning

– Impact of Lead Time

– Engineering Drawings and Specifications, Samples

– Requisition Details (electronic or paper)

Date originated, Document Number, Dept, Account Number, Signature(s)

Complete description of material or service required

Quantity, Shipping / delivery instructions

– Authorization to Buy– Impact of Lead Time

– History and Geography

– Request for Quotation

– Request for Proposal

– Request for Bid

– Other items to consider Input from Technical

Staff

– Supply Capability Quality

Qualitative Quantitative

Capacity Flexibility Change / Adoptability

Reliability

The essential steps in the Purchasing Process

SupplyMgmt

ProductionCustomer

ServiceShipping

SelectSupplier(s)

IssuePurchase

Order

Follow-Up& Expedite

Purchasing Process

CustomerDemand

ProductionSchedule

Several Pricing method

Sealed Bid or quotation

Open Profit Margin

Fixed Profit Margin

– Relationship to Material Requisition The Requisition provides the

information that populates several Purchase Order data fields (see Requisition Details)

– Ensure Risk Management– Acknowledgement– Internal Controls

BudgetsApprovals

– Recurring Purchase Order ReleasesPre-negotiated contracts

– Discrete Orders.

– Pre-negotiated Blanket.

– Pre-negotiated Vendor-Managed

.

– Maintenance, Repair, and Operating Supplies (MRO)

.

– Bid and Auction.

– Corporate Purchase Card (pCard)

The essential steps in the Purchasing Process

SupplyMgmt

ProductionCustomer

ServiceShipping

Receive &Verify

ProcessPayment

Purchasing Process

CustomerDemand

ProductionSchedule

– Relationship to Material Requisition and Purchase Order

Key data elements travel throughout

– Key objectivesConfirm receipt of goodsEnsure proper physical condition, quantity, documentation

Quality parameters met

– Cross functional activity among Purchasing, Receiving, Materials, and Finance

Key Document Flow

Requisition PurchaseOrder

Packing Slip(Receiving)

Invoice Payment

– Match the data in the Purchase Order, Packing Slip, and InvoiceDiscrepancies must be reconciled before payment is issued Some level of discrepancies can be ignored (e.g. if +/- 5% or

+/- $25)Audits of all

– Purchase Orders should be archived for up to 7 years

– Key Records to be Maintained Purchase Order Log of all PO’sCopies of Purchase OrdersCommodity file Supplier history fileOutstanding Contracts against which PO’s are placed

– Other items to considerCan be electronic or paperPaper can be managed by a third party

The essential steps in the Purchasing Process

SupplyMgmt

ProductionCustomer

ServiceShipping

MaintainRecords

Purchasing Process

CustomerDemand

ProductionSchedule

RAHEEL

Information System & Purchasing

• Planning • Sales Forecasting• Budgeting & Financial Control• Accounting • Legal• Engineering• Production & Production Control• Inventory Control• Quality Control and Receiving

Internal Information Flows to Purchasing

External Information Flows to Purchasing

• General Market Conditions• Sources of Supply• Suppliers’ Capacity• Suppliers’ Production Rate• Suppliers’ Labor Conditions• Price, Discount, Customs, Sales

and Taxes• Transportation Availability and

Rates• New Product and Product

Information

Information flows from Purchasing to Organization

• General Management• Engineering • Product Development• Marketing• Production• Legal• Finance and Accounting• Stores

IMPORTANCE OF SCM

• In any type of business it play very crucial role.

• In SCM process heavy investment is invested.

• 75% revenue Company generate by this process.

• By properly managing SCM ensure the better & smooth running of a Company.

ARSALAN

THANK

YOU

Waste it

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