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26 Cards in this Set
- Front
- Back
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ISM 2017 salary survey |
Chief procurement: $259,340 VP: $135,757 Director: $153,347 Manager: $109,401 Experienced Procurement: $78,937 Emerging procurement: $83,678 |
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Prof’s experience |
Director of industry relations Clinical assistant @ Mays IT consultant, HP Business planning, Compaq Planning manager, Compaq Purchasing manager, Compaq Material handling, TI Industrial engineer, TIpeofe |
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Professor’s registrations |
Professional engineer Texas PMI Project management professional APICS production and inventory management APICS integrates resource management ISM/NAPM Certified purchasing manager |
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Why is purchasing important? |
Contributes to competitive advantage Builds relationships and drive innovation Reduces time to market Increases value and savings |
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Factors that influence how important purchasing is to an organization |
Industry sector: manufacturing>services Nature of the item purchased Volume of purchasing Availability of materials and services Absolute dollar volume of purchases Percent of product costs represented by materials and services Type of material and services purchased |
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7 step process |
1. Spend analysis 2. Supply market assessment 3. Total cost analysis 4. Supplier identification/assessment 5. Sourcing strategy 6. Supplier negotiation/selection 7. Contract management/evaluation |
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Important skills for sourcing/procurement |
Be curious and eager to learn Analytical competences Negotiating effectively Influence people Working closely with engineering and manufacturing |
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Specifications |
Statement of an item’s required characteristics documented in a manner that facilitate its procurement or production and acceptance |
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Statement of work |
Specifies the work that is to be completed, when it is needed, and what type of service provider is required |
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Contract management |
Purchasing has the right to determine how to award contracts, developing and validating contracts with suppliers |
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Contracts |
Use the right types of contracts (price vs cost based) Initiation of compliance and/or improvement actions when less than desirable supplier performance occurs |
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Steps of contract |
1. Develop negotiation plan and ideal contract 2. Create contingency plans 3. Conduct negotiation 4. Sign contract |
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How to award contracts |
Competitive bidding Negotiation Some combination of both Primary contact with suppliers during contracting process Ensure contract compliance, periodic audits, contract renew Maintain contract database |
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Bid in these conditions |
Specifications are clear Volume is significantly high Price is the main criteria Suppliers are qualified and want contract Marketplace is competitive Dollar value is large |
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Supplier evaluation when |
During new product development At end of existing contract Due to poor existing supplier performance Buying new equipment Receiving internal user requisitions |
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Key sourcing requirements |
Vary from item to item Can be determined by internal and external customers: supplier quality, cost, delivery performance, specific technical/performance requirements |
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Rationalized supply base |
Replacing “good” suppliers with “better suppliers” Getting rid of marginal and small volume suppliers Development of supplier evaluation and measurement systems Global search for world class suppliers Initiation of supplier development activities to improve performance |
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Advantages of rationalized supply base |
Working with world class supplier Use of full service suppliers Reduction of supply base risk Lower supply base administrative costs Lower total product costs Ability to pursue complex supply management strategies |
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Formal approaches to rationalized supply base |
Twenty-eighty rule Triage Improve or else Competency staircase |
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Considerations for single sourcing |
JIT requirements Special tooling is required Time to market is crucial Quality considerations dictate Significantly lower freight costs |
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Supply chain strategies |
Insourcing/outsource Global sourcing Longer term supplier relationships E-reverse auctions Supplier development Early supplier design involvement Supply base optimization Supply rid management |
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Strategies |
Corporate: what business we in Business: competitive advantage Supply management: support business Commodity: how to purchase commodities to support strategies |
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Procure to pay process |
Process of buying goods which includes the initial decision to make the purchase, the process of selecting the good, and the transaction made to pay for goods purchased |
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Procure to purchase steps |
1. Forecast and plan requirement 2. Need clarification/requisition 3. Supplier identification/selection 4. Approval/contract/ P.O generation 5. Receive material and documents 6. Settle, pay and measure performance |
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Core purchasing process |
Cost management: price analysis and cost analysis Procure to pay Supply strategy: define structure, role, secure resources and governance Understand where you spend money and how you can improve Develop some rules on what you should buy; speak to customers/stakeholders Consolidate spending Contract management/cost management: related to supplier selection; cost analysis, RFx, bidding or negotiating or a combination of both; contract updates, renegotiation |
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Portfolio analysis |
Critical: strategic supplier (high complexity and value) Routine: low complexity and value Leverage: preferred supplier (high value and low complexity) Bottleneck: transactional supplier (high complexity and low value) |
