tailieunhanh - Lecture Purchasing and supply chain management (3/e): Chapter 1 - W. C. Benton

Chapter 1 - Purchasing and supply chain management. This chapter’s objectives are to: Understand the purchasing function’s contribution to profitability, identify the relationship between the purchasing function and other functional areas, explore the basic historical development of the purchasing function,. | 1 Chapter 1: Purchasing and supply chain management Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved. New Era of Openness and Accountability The 3 powerful forces Economics European Union’s (EU) financial crises Technology Internet, ERP, etc. Technology displacing labor Zeitgeist Accountability of financial institutions Shifting focus from labor to supply chain 2 Changes in Purchasing Function’s Environment Need to understand the relationship between the purchasing function and other functional areas! 3 PAST Labor-intensive manufacturers Large standardized batches Neglect materials and parts management Present Technology driven manufacturers New technologies More profit contribution by supply management But operated just like the Old Models Purchasing Dollar Responsibility The cost of acquiring, storing, and moving materials is an increasingly large portion of the cost of goods sold. The dollar responsibility of supply . | 1 Chapter 1: Purchasing and supply chain management Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved. New Era of Openness and Accountability The 3 powerful forces Economics European Union’s (EU) financial crises Technology Internet, ERP, etc. Technology displacing labor Zeitgeist Accountability of financial institutions Shifting focus from labor to supply chain 2 Changes in Purchasing Function’s Environment Need to understand the relationship between the purchasing function and other functional areas! 3 PAST Labor-intensive manufacturers Large standardized batches Neglect materials and parts management Present Technology driven manufacturers New technologies More profit contribution by supply management But operated just like the Old Models Purchasing Dollar Responsibility The cost of acquiring, storing, and moving materials is an increasingly large portion of the cost of goods sold. The dollar responsibility of supply management is very large in both relative and absolute terms. 4 Integrated Purchasing and Supply Management (ISM) 5 ISM Fundamentals of Purchasing and Supply Management Purchasing Administration Materials Management Price/Cost Analysis Special Purchasing Applications Supply management As a key Strategic Function Contributes to the bottom line Increases efficiency and productivity Improves competitive position and customer satisfaction Impacts the organization’s image and social policy 6 Example An order quantity decision 3 Different objectives Purchasing manager: “Minimize annual ordering cost.” PIC manager: “Minimize work-in-process inventory.” Traffic manager: “Minimize transportation cost.” Which one should given priority? 7 Organizing the Purchasing Function The Two Main Decisions: Where should the purchasing functions be located in the organization? What level of authority should the purchasing function have? 8 Purchasing: Centralize or Decentralize? 9 Future of Centralized .