Unformatted text preview:

Information Flows in the purchasing process(1). Purchase requisitions sent from inventory control to purchasing(2). PO sent to:vendorinventory controlreceivingaccounts payable(3). Packing slip (with goods) received from vendor(4). Stock notice (with goods) sent to warehouse(5). Notice of goods receipt sent to:accounts payablegeneral ledgerpurchasingPossible Goal ConflictsIndividual mangers goals may not be in congruence with organizational objectivesPurchasing may buy large quantities to reduce ordering cost and increase discounts leading to increased receiving, inspecting, and carrying costAmbiguity often exist in defining goals and success in meeting goalsA purchasing goal might be to select a vendor who will provide the best quality at the lowest price by the promised delivery dateRealistically, one vendor may not satisfy all 3 conditionsPrioritization of goals is necessary in choosing the best solution given the various conflicts and constraints placed on the processTrade offs are made in prioritizing among the goals that conflictIf the market is sensitive to satisfying customer needs, the company may pay high prices to ensure that it can obtain the highest quality goods on a timely basisSupply Chain: the connections from the suppliers of merchandize and raw materiel through to an organization’s customersThese connections include the flow of information materiels and servicesOrganizations mange links in their supply chains to be:Efficientget the right goodsin the right amountat the right timeat minimal costEffectiveCreate maximum value for their customersSupple Chain management (SCM) the combination of processes and procedures used to ensure the deliver of goods and services to customers at the lowest cost while providing the high value to customersSCM Software helps an organization execute the steps in the supply chainCategories of SCM SoftwareSupply chain planning softwareAccumulates data about orders from retail customers, sales from retail outlets, and data about manufacturing and delivery capability to assist in planning for each of the SCM stepsSupply chain execution softwareAutomates the SCM stepsIncludes ERP software that receives and routes orders, and executes invoicesMany connections in the supply chain are B2B automated interfacesThe multiplication of false orders up the supple chain can cause wild demand and supply fluctuationsBullwhip EffectBenefits of SCM:Lower cost to the customerHigher availability of productsHigher response to customer requestReduced inventories along the supply chainImproved buyer-seller relationshipsSmooth shipping and receivingReduced item costIncreased customer ordersReduced product defectPotential Problems with SCM InitiativeData not collected or not shared across functional boundariesInformation is not shared between supply chain partnersInaccurate data negatively affects the entire chainOver reliance on demand forecasting that may be inaccurateCompeting marketing and sales objectives can lead to unrealistic forecastMitigating Problems with SCM InitiativesTypes of collaboration in the supply chainCRP: continuous Replenishment (VMI or SMI)Co-managed Inventory (a form of CRP)CFAR: collaborative forecasting and replenishmentPrecursor to CPFRRetailer and manufacturer forecast demand and schedule production jointlyTrading partners share plans, forecast, and other data over the internetDuring planning and execution, partners negotiate resolution to exceptions such as:Dramatic change in plansPlans do not matchForecast accuracy is out of toleranceOverstock and understock conditionsTriggering the Purchasing ProcessPurchase Requisitions: internal request to acquire goods and servicesRequisitions are received for authorizes personnel within an organization are:For inventory replenishmentsReceived from automated inventory replenishment systems, such as SCM processesRouted by workflow for approval by the requisitioning department supervisor1.0 Determine RequirementsNeed to determine WHAT inventory to order, WHEN to order it, and HOW MUCH to orderPush based Supply Chain: goods and services are ordered in anticipation of demand based on sales and demand forecastPull-based Supply Chain: uses data from vendors and customers to make purchasing decisions on the basis of actual demandInventory Reorder methodsReorder Point (ROP) Analysis: each item is assigned a reorder point based on its sales rateEconomic Order Quantity (EOQ): order quantity based on cost of ordering and carrying inventoryABC Analysis: technique for ranking items in a group based on the output on the itemsCan be used to categorize inventory items according to their importance1.1 Accumulate Request1.2 Calculate Requirements2.0 order goods and services2.1 Select Vendor2.2 Prepare Purchase Order3.0 Receive goods and servicesInspect and Count goodsCompare receiving report and purchase orderPurchasing inputs and outputsPurchase Order (PO): a request for the purchase of goods or services from a vendorBlind Copy: certain data on a document is blacked out (blinded) such as quantities ordered on the PO available to receiving personnelVendor Packing Slip: accompanies the purchased inventory from the vendor and identifies the shipmentReceiving Report: a document, such as a PO, annotated with the quantity received that is used to record merchandise receiptsAcceptance Report: documents services received to formally acknowledge the satisfactory completion of a service contractPurchasing Process Data StoresInventory Master Data: record of each item stocked or regularly orderedVendor master Data: record of each vendor approved for use by the organizationPurchase requisition data: data on all purchase requisitionsPurchase Order Master Data: Open POs including status or items on orderPurchasing Receipts Data: record of each receipt of goods and servicesTechnology and the Purchasing ProcessE-Procurement: use of information technology to automate significant portions of the procurement process to reduce the number of people and amount of time requires to the procurement processEX. Purchasing agent can use intelligent agents, web service, and B2B exchangesPaperless Systems: eliminate documents and forms as the medium for conducting businessB2B Marketplaces: which are particular Web sites or portals that may be used as sources of supple in the procurement processRadio Frequency Identification (RFID): a system for sending and receiving data, using wireless technology, between an RFID tag and an RFID


View Full Document

UMD BMGT 326 - Chapter 12 Purchasing Process

Download Chapter 12 Purchasing Process
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Chapter 12 Purchasing Process and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Chapter 12 Purchasing Process 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?