Abstract
Definition of procurement:
It can be defined as the purchase of goods or services at the optimum possible cost, in the correct amount and quality.
These goods/services are also purchased at the correct time and location by signing a contract.
Definition of logistics: It is to get the right product, to the right place, in the right quantity at the right time, in the best conditions and at an acceptable cost. Definition of supply chain: A network of facilities and distribution options that performs the functions of procurement of materials, transformation into intermediate and finished products and distribution of these finished products to customers (from raw materials to distribution of the final product).
The trends:
•Push: Materials are produced accordingly to a planned forecast and moved to the next stage of the supply chain. (We produce for 15,000 products in the year, it is planed and not according to the demand) ex: Make to stock strategy.
It can be a good strategy to answer faster the demand. In the other hand, it is not a good strategy because the demand can decrease.
•Pull: Materials are only produced and moved when they are required. (Production starts when the customer has a demand.)
3 different strategies:
-Make to order strategy: a dress for just one person, or a plane
-lean strategy (stratégie sans surplus): created by Toyota Production system in the 30's and then developed in the US after WW2. It is use by a lot of automobile companies (Toyota). Purpose: ensuring that value is added at each stage of the process by eliminating mudas (waste) in 7 keys areas:
-Overproduction: if you produce too much, you will have to pay for a warehouse, salaries
-Waiting
-Transportation equals non value added time. You should reduce transportation time and optimizes it and try to add value during the transportation.
-Inappropriate processing (crash)
-Unnecessary inventory equals costly
-Unnecessary motion (movement in the company and outside the company)
-Defects equals production delays
-agile strategy: created by Martin Christopher at Cranfield University.
Purpose: To cope with volatility of the demand based on maximum flexibility. The tools: mass customization (a production philosophy based on the notion of postponement of final product as far downstream as possible; the decoupling point is the point at which we move the base product to customized product), postponed production. It is a way to share the costs with another company, an exchange of know-how, there are no wastes. Ex: Cooperation between Toyota, Peugeot and Citroen. Ex: Painting industry: they just have the three primary colors, when a customer wants a color, they just mixes the colors.
Extract
[...] What do customers buy? ? In what quantity? ? When? On the procurement side: - Can help you answering the following questions: ? What supply do I need? ? [...]
[...] Ship line companies (sea) Freight forwarder (freight agents) transitaire - A travel agent for goods - They arrange freight transportation - The company will not have to care about that Customs broker (commissionaire en douane) - They arrange customs clearance of goods - They are therefore dealing with customs agencies - They act as an intermediate between the shipper and customs NVOCC (non vessel operating common carrier) - They consolidate small shipments from various shippers into full containers load - Most of the freight forwarders now offer that service Couriers (coursier) - They process immediate deliveries - Usually small envelopes or small packages Integrators (enterprise d'envoi) - They offer end to end service from shipper to consignee - They use hubs to centralize all packages then dispatch them to their final destinations - DHL, Fedex? Third party logistics providers (operateur, global multimodal provider) - They offer many different services ? Transportation ? Warehousing ? Pick and pack (order preparation) ? Customized logistics solution (handling customer's returns) - Geodis How to select them? [...]
[...] The purpose - Minimizing human effort - Reducing time taken errors and costs - Optimizing warehouse space The method - Triggering the right warehouse task at the right time. Example of accomplishment - Automatic picking of material - Recommendation on the warehouse lay out/design 5. Radio frequency identification (RFID) It is a technology that identifies and locates physical assets. It works with a tag, attached to the products and a reader. International procurement and outsourcing Definition The procurement will cover all of the activities from identifying the potential supplier through delivery from supplier to customer. [...]
[...] The different steps Identify the needs: The demand management We will try to forecast the quantity, the quality and the date. Problems with the bull whip effect Write the specification Choose a procurement method -The Request for quotation devis -The request for bid appel d'offre -The request for proposal proposition What to show in these requests? - Company summery - Project or product detailed description and specification - Guidelines and requirements to respond to the request - List of people in charge of the request and contact numbers - Available budget - Evaluation criteria - Contract terms - The answer form Select the foreign supplier and evaluate their offers - Meeting with suppliers - Study the offers - Compare the offers (charts) - Get samples - Test the samples Presentation about the outsourcing The criteria to chose/evaluate the foreign source of procurement - Ability to understand the need of the outsourcing - Product quality - Price and payment terms - Management attitude - Customer service level - After sales and service offered - References, track records - Production capabilities and efficiency - Financial capabilities - Supplier's flexibility to respond to changes in specs - Prompt product availability - Freight charges and import duties related o the import from the supplier's location - ISO certification - Level of corporate social responsibility - Samples tests Signing the contract Placing the purchase order Order management We have to follow the products and know where it is. [...]
[...] These terms are incorporated into export-import sales agreements and contracts. What are these responsabilities about? - Cost of carriage and customs clearance - Organization of carriage and customs clearance - Division of risks between parties Who issue? - Coded by international Chamber of Commerce (ICC) in Paris in 1936 - Revised several times (last revision 2010) - Composed of 3 letters - Followed by a named place 11 incoterms in the 2010 versions 4 groups of incoterms - The E group : EXW named place (usually factory), the seller's responsibility stops at its own docks. [...]
