Supply Chain Management - Procurement

ByAnanth R

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Definition

Management of flow of goods The term coined by Keith Oliver in 1982 Includes storage of raw materials, work-in-process and finished

goods from point of origin to point of consumption

Supply Chain Management

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Supply Chain Management

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Supply Chain Management

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Bullwhip Effect

Supply Chain Management

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Bullwhip Effect – Behavioral Causes

Misuse of base-stock policies Misperceptions of feedback and time delays Panic ordering reactions after unmet demands Perceived risk of others player’s bounded rationality

Supply Chain Management

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Push vs Pull

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Procurement

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Types of Material

P Type - Common for all and expensive Q Type - Common for all and relatively inexpensive R Type - Project Specific and expensive

Procurement

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Types of Procurement based on Material

Raw material Purchase Sub Delivery Purchase

Procurement

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Types of Procurement

Single Tender OEM Collaborator Urgency (Repeat Order)

Limited Tender Competitive price Easy evaluation

Open Tender Highly competitive price Evaluation becomes a humongous task

Procurement

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Basic Terminologies

CS LC INCO – FOB, FCA, CIF, CFR PBG Lead Time LD Inspection LOI

Procurement