Optimization of Purchasing procedure

[subpad]

dear all,
i m new to this forum.. m working as a global sourcing analyst in a company which has business units in 6 countries........ could u please help how to optimize the purchase in various business units.
for an instance, few plant has got supplier very closer might not take 2 days and few other supplier might take 15 - 20 days in transport.......when we compare an item between two plant will be totally different...so could u please list out some of fixed and verible factors in terms of puchasing

in advance, thanks

Kind regards,
sivaraja sekhar
sekharsubpad@gmail.com

[Neo]

Originally Posted by subpad

dear all,
i m new to this forum.. m working as a global sourcing analyst in a company which has business units in 6 countries........ could u please help how to optimize the purchase in various business units.
for an instance, few plant has got supplier very closer might not take 2 days and few other supplier might take 15 - 20 days in transport.......when we compare an item between two plant will be totally different...so could u please list out some of fixed and verible factors in terms of puchasing

in advance, thanks

Kind regards,
sivaraja sekhar
sekharsubpad@gmail.com

Sorry i cannot grasp 100% what u want us to help.Can you be more specific Try to elaborate more on what u want with example if possible.

[Starbucks Junkie]

Originally Posted by subpad

dear all,
i m new to this forum.. m working as a global sourcing analyst in a company which has business units in 6 countries........ could u please help how to optimize the purchase in various business units.
for an instance, few plant has got supplier very closer might not take 2 days and few other supplier might take 15 - 20 days in transport.......when we compare an item between two plant will be totally different...so could u please list out some of fixed and verible factors in terms of puchasing

in advance, thanks

Kind regards,
sivaraja sekhar
sekharsubpad@gmail.com

sivaraja,

As Neo has said if you can be more specific we may be able to offer assistance, for example are you referring to a purely purchasing function such as TOC, Vendor Management, or is the picture more broader and you want to consider Supply Chain Management, Inventory Management across each site, safety stock for each site based on supply etc..etc..

[subpad]

thanks for all of ur comments...

i agree with ur words. i m looking at the picture much bigger, i m woundering where to start....because of lots of issue in around entire supply chain.

first of all, i m planning to optmize the inventory level in all business unit.... .

could u please guide me how to optmize inventory level? what are factors i must measure?

[Starbucks Junkie]

Originally Posted by subpad

thanks for all of ur comments...

i agree with ur words. i m looking at the picture much bigger, i m woundering where to start....because of lots of issue in around entire supply chain.

first of all, i m planning to optmize the inventory level in all business unit.... .

could u please guide me how to optmize inventory level? what are factors i must measure?

With regards to inventory, two of the factors to consider is volatility of demand, and volatility of supply, how much these fluctuate from the mean will aid in understanding the amount of safety stock needed to try to cover the eventualities.


Also is any demand planning undertaken, do you have a robust product forecasting process? As again this will aid you in determining your optimum stock levels.

I have an Excel Safety Stock optimisation tool, this tool reviews historic usage, yearly demand, and supply history and returns a SS level that can afford a 98.8% service level, it is flexible so you can tweak up or down the service level to your choice.

If you are interested in this, just let me know, send me a PM with your email address on and I will email the tool to you.

Equally, if you do not have a robust forecasting tool, again I have a very effective tool that I can send to you. Again just let me know.

Others issues to consider when reviewing inventory levels are, space needed for inventory, type of item/product, speed of use...

Hope this has helped.

SJ

[Neo]

Siva,

I suppose you are in manufacturing, some of the target areas mentioned here should give you some idea on plant wide implementation.

Target Items For – Inventory Optimization

1.Classify or Categories Inventory – Set inventory level by class
2.Identify, recommend import items that can be localize
3.Reduce Order L/T – Request supplier to keep buffer stocks based on forecast
4.Implement stock on consignment at plant- Vendor Management Stocks
5.Implement JIT deliveries or schedule deliveries for common and local items
6.Reduce Slow Moving and Dead Stock –Analyze and Justify
7.Ensure Real Time Inventory to avoid wrong planning
8.Minimize revision of production plan – improve forecast accuracy
9.Implement purchase materials receiving cut off date- avoid receiving not required material during end of month
10.Review Purchase Order Due Date / ETA Date Setting – Avoid setting P/O due date end of month to avoid receiving during month end closing
11.Ensure Inventory Accuracy including WIP to avoid excessed stocks
12.Review vessel sailing schedule to avoid In Transit Stock-P/O DD setting
13. ETC