Supply Processes and Technology

Supply Processes and Technology

1. Supply Management Process

   • Supply: exchange of money for goods and services.
   • Process: set of activities that has a beginning and an end.
   • Process oriented person: flow of information, material, services, no matter how many departments touch it.
   • Functionally oriented person: only considers the steps of a department.

2. Strategy and goal alignment:

   • 1st step: building internal consensus to the opportunities, to add value to the organization.
     • Horizontal alignment
     • Vertical alignment

3. Information Flows

   • Inward flows
     • Info. from Organization sent to supply
   • Outward Flows
     • Info. from supply is sent to others in the org.

4. Supply Process (steps)

   • Recognition of need.
   • Description of need.
     • Requisition
       • Authority
       • Internal clarity
       • Internal clearance
       • Types
         • Standard requisition
         • Traveling requisition
         • Bill of materials (BOM)
         • Stores/inventory requisition
   • Identification & analysis of possible sources of supply
     • RFI (Request For Information)
     • RFQ (Request for quotation)
     • RFP (Request for proposal)
     • Request for bid
   • Supplier selection and determination of terms.
   • Preparation and placement of purchase order.
     • Format: essential requirements.
     • Routing: who needs access to info.
     • Blanket and open-end purchase orders
     • Master Service Agreements MSA: an agreement where suppliers provide predetermined services.
   • Follow-up and/or expediting the order
     • Follow-up: ensures that supplier meet delivery.
     • Expediting: Pressure on a supplier to meet original delivery.
   • Receipt and inspection
   • Invoice clearing and payment
   • Maintenance of records and relationships.

5. Improving process efficiency and effectiveness.

   • Process flow chart: assessment of the nature of the spend
   • Strategic spend: how the strategic spend can be more efficient
   • Nonstrategic spend
   • Corporate Purchasing cards
   • Systems contracting
   • Vendor or supplier managed inventory.

6. Information Systems Technology.

   • Software
   • Types:
     • Strategic level
     • Management level system
     • Knowledge level system
     • operational level system
   • Databases
   • E-procurement system
   • E-catalog
   • EDI

7. Referencia: Johnson, F., Leenders, M. R., Flynn, A. E. (2006). Purchasing and supply management [Digital Version PDF] (Fourteenth Edition). New York: McGraw-Hill.

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