Premium Essay

Purchase and Supply Chain Management

In: Business and Management

Submitted By naishadh
Words 2330
Pages 10
Purchasing and Supply Chain Management Purchasing:
*Importance of Purchasing:- Purchasing is important because...... 1. Purchasing cost account for 60 to 70 % of the total cost i.e (any saving in purchasing cost can be directly increase profit of the firm).
This can be seen with the help of the Page | 1 following table.

Items | Firm A | Firm B | Firm C | Raw Material | 60 | 70 | 80 | Overheads | 10 | 10 | 10 | Profit | 30 | 20 | 10 | TOTAL | 100 | 100 | 100 | It can be seen from the above table that ‘A’ is best firm making 30% profit and ‘C’ is below average firm making only 10% profit.

2. Purchasing is important because purchasing function affects the entire organisation such as production process, marketing, sales etc.
Thus purchasing is the most important function of the management.

*steps in purchasing or purchasing cycle:-

The steps involved in purchasing....

* Demand forecasting / Sales forecasting. * Purchase requisition (requirement). * Inviting Quotations. * Selection of supplier purchase order. * Receiving of materials / inspection / payment. * 1. Demand Forecasting / Sales Forecasting:-
The first step in the purchasing is demand forecasting and sales forecasting. Demand forecasting is done at macro level i.e(All India Level).while sales forecasting is done at micro level i.e(Company Level).
For example:
Demand for car is 12 lack car and if maruti has 50% market share then sales will be 6 lacks car. i.e the company must plan, production, raw material requirement, labour requirement on the basis of 6 lacks cars. 2. Purchase Requisition (Requirement).
The next step in purchasing is to invite purchase requisition from different departments.
For example:
Production department wants 1000 shirts for which they

Similar Documents

Premium Essay

Preliminary Business Report

...SHYAMKUMAR PALAYIL SASEENDRAN VINU SUNILKUMAR Introduction This report provides an overview of the role of BPM and value chain. The report will highlights the problems the Cullen creative cooking Pty Ltd is facing and will priorities them on the bases of most urgent. It will include the modified organizational structure of the company, along with the as-is and to-be diagram. It also provides an insight to the project scoping diagram and will provide possible solution for the company. Based upon the report their will be some recommendation for the company in order to improve their business Table of Contents 1. Business process management (BPM) and strategy 4 2. Problem Analysis 5 Fig 2.1 Project scoping diagram 6 3. Proposed solution 6 Fig 3.1: As is diagram 7 3.2 To be diagram 8 4. Solution considerations: 9 Fig 4.1 modified organization chart 10 4.2 What changes to be made? 10 4.3 How to do it 11 4.4 Common areas of cost 11 5. Recommendations 12 6. References 13 1. Business process management (BPM) and strategy BPM is a way to connect and integrate all the business processes in such a way so as to determine the additional performance improvement. While some might refer it to as an analysis of the value chain.(Singh 2012) All these will helps the Cullen creative cooking Pty Ltd to manage their problems and to achieve the goals .A company that adopts BPM gets...

Words: 2427 - Pages: 10

Premium Essay

Consumer Driven Supply Chains: the Case of Dutch Organic Tomato

...Distribution management | Consumer driven supply chains: the case of Dutch organic tomato | Author: F. Anastasiadis, Y.K. van Dam | MKT 625 | | | Introduction Supply chain management refers to the efficient integration of various processes involved in turning resources into consumer products.  Effectiveness of the supply chain is more easily understood in terms of Value Chain Management, and the integration of processes that turn resources into consumer value.   The current paper reports two studies into the value chain of organic produce in Netherlands.  The paper combines two different research approaches to study which consumer motives and values are the main drivers of organic consumption. These motives are centered on hedonic, benevolent, and Universalist values. The study reconfirms earlier findings that health and taste are important motives driving organic food consumption, and that next to this environmental friendliness and naturalness are important drivers.  More fundamentally, the consumption value of organic food is strongly related to social and ethical principles and beliefs.  By committing it to superior ethical performance the organic supply chain could create a competitive advantage that is not easily copied by competing products. Objectives of the Study The basic objective is to understand consumer product knowledge and motivations with respect to organic products. In other words, this research focuses on the consumers’ beliefs towards...

Words: 1480 - Pages: 6

Premium Essay

Supply Chain Management

...business model and explain their supply chain strategy. Amazon is one of the leading online retailers in the world. From foundation, Amazon was an online book retailer. Their online success allowed them to move into other areas including e-books, music and other products. Jeff Bezos, Founder, started the business in his garage and has built the company on an unconventional business model that in my opinion gives Amazon a competitive advantage. Amazons business model consists of a combination of logistical processes and information services that work together to provide a sustainable competitive advantage. Amazon provides shopping convenience to consumers, products can be ordered at the click of a button without the hassle of the retail store experience. Consumers experience an easy purchasing experience with a variety of payment methods such as paypal, bill me later, and credit card payments. As an added convenience consumers can set up accounts and save payment information for future purchases. Amazon has a very fast turn-around time for items fulfilled in Amazon fulfillment centers. In many cases consumers can expect their products to be shipped within a 24 hour period. As an additional service to consumers, Amazon provides what they call “decision enabling information”. Amazon compares products and pricing, provides consumer product reviews and ratings, and provides detailed product descriptions to aid consumers in making the best product purchase decisions. Amazon also has a...

Words: 1055 - Pages: 5

Premium Essay

Inf 336 Final

...importance of Purchase and Supply management INF 336 Instructor: Lori Deere In my time of jobs, I’ve had some experience of dealing with projects, vendors (suppliers) and some of the business. When I worked for Whole Foods, I dealt with different vendors and dabbed in some of the project aspect of the work. In later time, I became the bulk buyer and got more involved. At that time I really didn’t know how vital purchasing and supply management were in business. In an organization, buying supplies and keeping them in order is very important to help the business run correct. For this paper, I’ll discuss the aspects of purchasing and supply management and why it’s important. It will go over some of the important parts with explanation. In the process, I’ll do my best to give examples from my past experiences and other examples. SO that being stated, let’s go into what exactly is purchasing and supply management. “Supply management is focused on the acquisition process recognizing the supply chain and organizational contexts” (Johnson, P. F., Leenders, M. R., & Flynn, A. E. 2010). Purchasing and supply management is a complex matter that requires more than what most think. It’s stated that there is no easy way to organize the functions of supply, integrate suppliers correctly, and conduct the activities involved. It’s actually more of challenge of anything. In addition, each organization needs its own unique method. “It is also challenging because every supply decision...

Words: 2594 - Pages: 11

Premium Essay

Manager

...Course/Unit Information | Course | Postgraduate Diploma in Supply Chain Management and Logistics. | Awarding Body | The Association of Business Practitioners | Batch | SCML - 1406 | Instructor Information | Name | LeenaWanganoo | Phone | +971501139849 | Skype | Leena.wanganoo@gmail.com | Email | Leena.westford@gmail.com | Assignment Information | Full/ Part Assignment | Part – Task 1( LO1, LO2) | Date Assignment Issued | 4.07.2014 | Date Assignment Due | 25.07.2014 | Student Information(To be filled by the student prior submitting the assignment) | Name | Siji Sundaran Manalikkattil | Email | sijisundaran@ymail.com | Date of Submission | 19th July 2014 | Student Assignment covering form is an integral part of the assignment document and should be submitted along with all submissions. Student Declaration I, Siji Sundaran Manalikkattil hereby confirm that this assignment is my own work and not copied or plagiarized. It has not previously been submitted as part of any assessment for this qualification. All the sources, from which information has been obtained for this assignment, have been referenced as per Harvard Referencing format. I further confirm that I have read and understood the Westford School of Management rules and regulations about plagiarism and copying and agree to be bound by them. Students Signature : Siji Student Name : Siji Sundaran Manalikkattil Date : 19th July 2014 Learning Outcomes and Assessment...

Words: 5507 - Pages: 23

Premium Essay

Ax2012 Supply Chain

...Explain the concepts of supply chain in Microsoft Dynamics® AX 2012. Describe the concept of product information management. Discuss the concept of inventory management. Explain the concept of warehouse management. Describe the concept of quality management. Introduction The Overview module provides an introduction of the supply chain and logistic features in Microsoft Dynamics AX 2012. Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 1-1 Supply Chain Foundation in Microsoft Dynamics® AX 2012 Supply Chain Supply chain management is the management of a network of interconnected business involved in the ultimate provision of product and service package required by the end consumer. There are many processes in the supply chain. The Sales Order Processing figure displays the flow for a sales order through Microsoft Dynamics AX 2012. FIGURE 1.1 SALES ORDER PROCESSING The Purchase Order Processing figure displays the flow for a purchase order through Microsoft Dynamics AX 2012. FIGURE 1.2 PURCHASE ORDER PROCESSING 1-2 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 1: Overview Product Information Management Product information management is the process of managing information about products. This information or data is required to purchase, sell, and manage the ...

Words: 728 - Pages: 3

Premium Essay

Miss

...STRATEGIC SUPPLY CHAIN MANAGEMENT AND LOGISTICS Table of Contents Introduction 3 SCM effective in achieving organizational objectives 4 Link between the functions of Supply Chain Management and business 4 The key factors which have achieved integrated supply chain 5 Supplier relationships with the organization 5 Information technology to form strategies 6 Organizational relationship with suppliers 6 Integration of the different parts of the supply chain 7 IT contributes to the management of the supply chain 8 Effectiveness of IT in managing the supply chain 8 Role of logistics in the supply chain 9 Strategy to improve the supply chain of an organization 11 References: 13 Introduction Supply of goods and services used in the supply chain encompasses all the facilities and processes ; From procurement of raw materials , through manufacturing operations , the final user , and supply chain management ( SCM ) affect the delivery and improve the performance of the entire supply chain, supply chain, operations management refers to all of the other sections of the clothing company . (Hugos, 2003) One of the major functions and components of SCM: * Defining the boundaries of business and relationships * Managing demand and supply * Logistics * Purchase * Selling System Interface * Manufacturing System Interface * Product Design Interface Boundaries and definitions of business relationships initiated at the core of the SCM...

Words: 4223 - Pages: 17

Premium Essay

Purchasing and Supply Chain Management

...purchasing and supply chain management in an organization. Over the years, the role of purchasing and supply chain in an organization has continued to evolved, changed, and developed in response to changes witnessed in business environment. The increasing numbers or world-class competitors in local and international trades are a direct driver of increase in purchasing and supply chain roles and demands. Many management scholars have defined the notion and significance of supply chain management in detail across the globe. Many times, theoretical definitions of what purchasing and supply is are provided. But This term paper will firstly, suggest that purchasing and supply chain management is a developing field that constantly changed based on happenings in business environment. And secondly, suggest that individual firms’ purchasing and supply chain is base on such firms’ type of business, size, and mission. Evolution of supply chain management. Supply chain management involves the management of all activities in order to satisfy the ultimate consumer. It covers almost all business activities, including marketing, manufacturing (or service provision) purchasing, logistics and arguably is an all-inclusive concept that create a world-class culture and continue economic development. (Quayle, Michael 2006) In a nutshell, purchasing and supply chain management is a series of interwoven activities that cut across every departments of on organization. Purchasing and supply chain managements’...

Words: 2283 - Pages: 10

Premium Essay

Supply Chain Management

...Supply Chain Management There are many aspects of business today. The most important and most expensive is not manufacturing and production cost. Today the most expensive aspects of any product is getting the product to the consumer and make sure that at all time the customer can purchase the product without delay. To consider the fact the forty five percent of purchases that are not necessary but spontaneous; those product must be seen and readily available to purchase. Even the ones that are necessary must be seen and ready for purchase or it may result in a poor overview of the company and may result in the loss of consumer support. To make sure that this does not a cure a company must have in place a very well managed supply chain. For this to happen the company must first understand what is the definition of a supply chain the six important aspects, certain software and of course some knowledge of global supply chain management. If there is an interest in becoming a supply chain manager there are certain steps in achieving that goal. This information might help not only ones professional career but also the company’s overall level of competitiveness in today’s ever changing market place In today’s complex business world, an organization’s overall success is based on the efficiency and effectiveness of its supply chain. The organization’s competitive strength relies on two main facets, a firm’s products and the processes that provide products to customers. An effective...

Words: 2568 - Pages: 11

Premium Essay

Zzzz

...[pic]东北财经大学本科生论文形式课程考试 成绩评定单 (Essay Cover of Non-Paper Exam, DUFE) 论文题目(Title)Successful supply chain management of Wal-Mart 学生姓名(Student Name)Jasson 学  号(Student Number) 2013212082 专  业(Programme)Business Management年  级(Level) Sophomore 课程名称(Module Name) 课 程 号(Module Number) 论文成绩(Score)  |论文评语:(Comments)—— | | | | | | | | | | | | | | | |任课教师签字: | |(Signature) ...

Words: 1463 - Pages: 6

Premium Essay

B2B Business

...between the two. The two types of procurements that firms make are for direct goods and indirect goods. Direct goods are directly involved in the production process such as the sheet steel used to produce an automobile body. Indirect goods are all other goods that are needed to carry out the production process, but are not directly involved in creating the end product. They include office supplies and maintenance products, which are often called MRO (maintenance, repair and operations) goods. 5. Name and define the two methods of purchasing goods. The two methods of purchasing goods are contract purchases and spot purchases. Contract purchases are long-term agreements to buy a specified amount of a product. There are pre-specified quality requirements and pre-specified terms. Spot purchases are for goods that meet the immediate needs of a firm. Indirect purchases are most often made on a spot purchase basis in a large marketplace that includes many suppliers. 6. Define the term supply chain and explain what SCM systems attempt to do. What does supply chain simplification entail? The supply chain refers to the series of transactions that links sets of firms...

Words: 875 - Pages: 4

Premium Essay

Absract Exercise

...models, SERVQUAL and Groonroos and the article limits itself to these two service quality models and their individually limited appllication areas. The article argues that customer satisfaction is influenced by a variety of quality subjects, these include functionalty, technical, company image and service quality, and it seeks to find the effect from the aforementioned service quality models. Author: J. Will M. Bertrand and Jan C. Fresco Title: Modelling and Simulation, Operations management research methodoligies using quantitative modeling Journal: International Journal of Operations & Production Management, Vol. 22, No. 2, 2002, pp. 241-264 The research question in this article can be as such: “How can quantitative modeling research further the understanding of operations management?”. The article, thus, focuses on research methodology related to operations management and it comes up with guidelines for how to conducting quantitative model-based research in operations management. Regarding...

Words: 2310 - Pages: 10

Premium Essay

Marketing- Supply Chain

...Supply chain management helps organizations effectively satisfy customers. As a series of individual functions, the supply chain follows production from conception to delivering a product to the end consumer. The supply chain is made up of interconnected segments that must cohesively work in conjunction with one another in order to achieve the common goal. The point of a supply chain is to systematically orchestrate all parties, directly or indirectly, associated with turning raw materials into products and the distribution of those products, which includes transporting, storing, and supplying those products to retailers for customer consumption. Each link in the supply chain is valuable, interconnected, and interdependent. Although a supply chain can vary depending on the goods or services produced, this paper will explore the basic supply chain links and the value found in the raw materials supplier, manufacturer, distributor, retailer, and end consumer. The importance of managing the supply chain rests in the ability to give the customers what they want when they want it. Although it may sound simple, this task offers challenges when a business factors in the obstacles that can arise along the supply chain. For example, a manufacturer of automobile parts depends upon a supplier to provide the materials needed to build the part, but the manufacturer also considers the barriers that might hinder the supplier in providing the material for the parts. Hiccups in the supply chain...

Words: 1109 - Pages: 5

Premium Essay

Purchasing and Supply Management Chapter 1

...1 Chapter One Chapter Outline Purchasing and Supply Management Supply Management Terminology Supply and Logistics The Size of the Organization’s Spend and Financial Signifi cance Supply Contribution The Operational versus Strategic Contribution of Supply The Direct and Indirect Contribution of Supply The Nature of the Organization Supply Qualifications and Associations Challenges Ahead Supply Chain Management Measurement Risk Management Sustainability Growth and Infl uence Effective Contribution to Organizational Success The Organization of This Text Conclusion Questions for Review and Discussion References Cases 1–1 Qmont Mining 1–2 Erica Carson 1–3 Southeastern University Purchasing and Supply Management 2 Purchasing and Supply Management Key Questions for the Supply Decision Maker Should we • Rethink how supply can contribute more effectively to organizational goals and strategies? • Try to find out what the organization’s total spend with suppliers really is? • Indentify opportunities for meaningful involvement in major corporate activities? How can we • Align our supply strategy with the organization’s strategy? • Get others to recognize the profit-leverage effect of purchasing/supply management? • Show how supply can affect our firm’s competitive position? Every organization needs suppliers. No organization can exist without suppliers. Therefore, the organization’s approach to suppliers, its acquisition processes and policies, and its relationships with...

Words: 12101 - Pages: 49

Premium Essay

Suppply Cahin Management Report

...A Project Report on Supply Chain Management Submitted By:Utpal Chaturvedi MBA II Sem, 2009-10 Guided ByMiss Latika Dhuria Vivekanada Institute of Technology, Jaipur ACKNOLEDGEMENT I take this oppurtinity to express my profound gratitude and deep regards to my guide for his exemplary guidance,monitoring & constant dedicated encouragement throughout the course. The blessing,help & guidance given by him from time to time shall carry me in a long way in journey of life on which I am about to embark. Again I would like to express my deep regards to HOD Mr. Praveen Choudhary & Project Guide Miss Latika Dhuria. Table of Contents Sr.No 1. 2. Topic Basic Concepts of Supply Chain Management Page No. Scope of Supply Chain Management 3. Area of Work in Supply Chain Management 4. How Supply Chain Works 5. Participants in Supply Chain 6. Process of Supply Chain Management 7. 8. 9. 10. 11. 12. 13. Supply Chain Management Planning & Sourcing Activities involve in Supply Chain Management Supply Chain Coordination and Use of Technology Information Systems that Support the Supply Chain Advantages & Disadvantanges Supply Chain Conclusion Biblography BASIC CONCEPTS OF SUPPLY CHAIN MANAGEMENT Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits...

Words: 9443 - Pages: 38