CH 4 Supply Processes And Technology

CH 4 Supply Processes And Technology

1. Supply

   • Is the exchange of money for goods and services
   • Can represent
     • 50-70% percent of costs for manufacturing organizations
     • 30-40% percent of costs for service firms

2. ERP

   • Enterprise Resource Planning

3. PROCESS FIRST, TECHNOLOGY LAST

   • Process
     • Set of activities that has a beginning and an end, in a specific sequence and has inputs and outputs
       • Process oriented person
         • Considers the flow of information, materials, services, and capital throughout the process no matter how many functions or departments touch it
       • Functional Oriented Person
         • Only considers the steps for which his or her department is responsible.
     • Reasons to developing a supply process
       • Large number of items
       • Large dollar volume involved
       • Need for an audit trail
       • Severe consequences of poor performance
       • Potential contribution to effective organizational operations inherent in the function

4. Information Flows

   • Inward flows
     • Information from within the organization is sent to supply
       • Need for materials
       • Statements
     • Information from external sources is sent to supply
       • Prices and deliveries
       • Market conditions and import duties
   • Outward flows
     • Information from within supply is sent to others within the organization
       • Supplier pricing
       • Market conditions
     • Information is sent from supply to external sources
       • Quotes
       • Proposal

5. Supply process

   • Steps
     • Recognitions of Need
     • Description of Need
     • Identification and analysis of possible sources of supply
     • Supplier selection and determination of terms
     • Preparation and placement of purchase order
     • Follow-up and/or expediting the order
     • Receipt and inspection
     • Invoice clearing and payment
     • Maintenance of records and relationships

6. Information Systems

   • Includes interconnected components that collect, process, and store raw data and distribute information to support decision making, control, and coordination within the organization
   • BENEFITS
     • Cost reduction and efficiency gains
     • Data accessibility
     • Speedier communication
     • Dedicate resources to strategic issues
     • Data accuracy
     • System integration
     • Monetary control

7. FUENTE: Johnson F, Flynn A. (2015). Purchasing and Supply Management. New York: Mc Graw Hill.

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