Proceso De Compras

PURCHASING AND SUPPLY MANAGEMENT

No organization can exist without suppliers

The approaches we have, as organizations with the supplier will not only affect the performance of the suppliers, but our organization as well.

No organization can be successful without the support of its suppliers base, operationally and strategically, short and long-term.

Supply management focuses on the acquisition recognizing the importance the supply chain and organization context.

Special emphasis is on decision making that aligns the supplier network and the acquisition process with organizational goal and strategies, this ensures short-term and long-term value for funds spent.

It is very challenging because it is a dynamic process not static one.

More over some of the brightest minds are being hired as marketing and sales experts in order to get YOU to choose their company as your suppliers.

Also challenging because it depends on various factors, the combination which may be unique to a particular organization.

Supply should not only focus on cutting costs down but also with revenue enhancements. What can supply do to increase revenue or decrease costs? This should be on every managers mind.

The rapidly changing supply scene, with cycles of abundance and shortages, varying prices, lead times, and availability, provides a continuing challenge to those organizations wishing to obtain a maximum contribution from this area.

PURCHASING AND SUPPLY MANAGEMENT

It was during WW1 and WW2, that the success of a firm was not dependent on what it could sell, since the market was almost unlimited, but the real trouble was to obtain from suppliers the raw materials, supplies and services they needed to keep the factories running.

This lead to attention being given to the organization policies, and procedures of the supply function AND then it emerged as a recognized managerial activity.

The Middle East oil embargo in the 1970’s intensified both the shortage and the price escalations. This historical event put the spotlight directly on supply.

In the 1990’s it became clear that organizations must have both efficient and effective supply functions if they wanted to compete successfully in the global marketplace.

21st century brought new challenges such as: sustainability, supply chain security and risk management.

In large supply chains supply professionals are divided in 2 categories

Tacticians: day-to-day requirements

Strategic thinkers: They take an imaginative approach on achieving supply goals in the short-term and long-term.

When working in supply words such as procurement, purchase, material, material management, logistics, sourcing, supply management, and supply chain are used almost interchangeably. Also two persons doing the same work in different companies in different sectors might have different names but the same responsibilities.

SUPPLY MANAGEMENT TERMINOLOGY

Purchasing or supply management is not only concerned with the standard steps in the procurement process:

1. Recognition of need

2. Translation of that need into a commercially equivalent description

3. Search for potential suppliers

4. Selection of a suitable source

5. Agreement on order or contract details

6. Delivery of product or service

7. Payment of supplier

We have other responsibilities in supply that may include receiving, inspection, warehousing, inventory control, materials, packing scheduling

Lean purchasing: tools and techniques to ensure every step in the supply process adds value. Inventories levels are kept at minimal levels.

Instant communication is essential and shared.

SUPPLY AND LOGISTICS

What are logistics?

The Council of Supply Chain Management Professionals describes it as “Logistics management is that part of the supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements”

Logistics is not confined to manufacturing organizations but it is important to the service industry as well as private and public sector firms.

The attraction of logistics is that it views the material flow process as a whole from initial need of raw materials to finished product or service to the customer.

What is supply chain management?

The Institute for Supply Management (ISM) defines it as “the design and management of seamless, value added process across organizational boundaries to meet the real needs of the end customer. The development and integration of people and technological resources are critical to successful supply chain integration”

Some managers feel that the term “CHAIN” should not be used because it does not convey what really happens in a supply or value chain, they prefer the term “NETWORK” or “WEB”.

The organization use of terms such as purchasing, supply, procurement and supply chain will be based on 3 things:

Their stage of development and sophistication

The industry in which they operate

Their competitive position

THE SIZE OF THE ORGANIZATION’S SPEND AND FINANCIAL SIGNIFICANCE

The amount of money organizations spend with the suppliers is staggering. Collectively private and public organizations spend every year $26 trillion U.S Dollars with suppliers.

In almost every manufacturing organization, the supply area represents by far the largest single category of spend, ranging from 50-80 percent of revenue. Wages by comparison are about 10 to 20 percent or revenue.

PROFIT-LEVERAGE EFFECT

The profit-leverage effect of supply savings is measured by the increase in profit obtained a decrease in purchase spend.

REDUCTION OF INVENTORY INVESTMENT

Since C.P.As value inventory items at the purchaser at purchased cost, including transportation, the same item stored at the suppliers typically have a lower inventory investment and carrying cost. By doing this the financial impact of supply on the balance sheet and income statement become even better, thus creating a healthy company from the financial point of view.

While the financial impact of supply is obviously significant, it is by no means the only impact that supply has on an organization’s ability to compete and be successful… as we will see.

SUPPLY CONTRIBUTION

Three major perspectives on supply.

Operational vs. Strategic

Direct vs. Indirect

Negative, neutral and positive.

Operational vs. Strategic

Operational: trouble avoidance

It focuses on the day-to-day, transactional operations traditionally associated with purchasing. This can be almost automated in order to free up time to focus on strategic contributions.

Strategic: opportunistic

It is future oriented and searches for the opportunities to provide competitive advantage. We will take a closer look at strategic side on Ch. 2

Direct vs. Indirect

Direct: Bottom line impact

Supply savings, profit-leverage effect are some of the ways that supply affects directly the company financial statements. We would expect that the savings would be seen at the bottom line but it is not always this way. Budget heads may decide to take the money and spend it on other requirements.

Indirect: Enhancing performance of others

Better quality reduces rework, lower warranty costs, increased customer satisfaction, and/or increases the ability to sell more at a higher price.

The benefits of indirect contribution may outweigh the direct contribution, but measuring the indirect benefits is difficult since many of them are intangible.

INFORMATION SOURCE

Supply unique position vis-à-vis the marketplace should provide a comprehensive listening post.

EFFECT ON EFFICIENCY

The supply department will affect directly how the rest of the organization is working. Organizations might be stopped by poor organization decisions.

EFFECT ON COMPETITIVE POSITION/CUSTOMER SATISFACTION

A firm cannot be competitive unless it can deliver end products or services to its customers when they are wanted, at the quality desired and at the price the customers feels is fair.

A chemical company was able to reduce its costs by changing to a raw material that was not only cheaper but enviormentally superior and had better quality as well. What do you think happened to the market share of this company and why?

EFFECT ON ORGANIZATIONAL RISK

The supply function affects the risk level for the organization at an operational, financial and reputation risk.

Given that commodity and financial markets establish prices that may go up and down beyond the power of the purchaser, and that long-term supply agreements require price provisions, the supply area may represent a significant level of financial risk.

FURTHERMORE UNETHICAL AND QUESTIONABLE SUPPLY PRACTICES AND SUPPLIERS MAY EXPOSE THE ORGANIZATION TO SIGNIFICANT REPUTATION RISK!

EFFECT ON IMAGE

The actions of the supply personnel influence directly the public relations and image of a company. If you have poor businesslike manners they will form a poor opinion of your company, which they will translate to others and soon you might end up with NO suppliers.

TRAINING GROUND

It is a great opportunity for up and coming managers to get their hands in the dirt and be exposed to pressure and quick decision-making. This helps the organization realize the individuals abilities and willingness to make sound decisions and assume responsibility.

MANAGEMENT STRATEGY

It helps guide the company to the place where they want to be.

Environmentally friendly

Socially responsible

Technological

THE NATURE OF THE ORGANIZATION

It can either be PUBLIC or PRIVATE

PUBLIC: It includes all levels of government from municipal to state to federal. They tend to be service providers but are not exclusively so, and are subject to strict regulatory requirements regarding acquisitions processes and policies.

Nongovernmental organizations (NGOs) and other nonprofit organizations would have a breakdown similar to those listed for public organizations, but might also operate internationally.

PRIVATE: Includes companies with publicly trades stocks, tend to have fewer constraints on need definition, specification and supplier selection. Transparency of commitments with suppliers has recently become more relevant to ensure the long-term commitments are properly disclosed in a company financial statement.

They can produce either GOODS or SERVICES

Manufacturers:

Largest portion of needs is generated by customer needs

The largest portion of spend with suppliers will be on direct requirement which compromise products sold to customers.

Service Providers:

Largest portion of need is generated by capital, services, and other requirements enabling employees to provide the service.

In retailing the largest spend is focused on resale requirements.

Very few organizations are purely manufacturers or SP. Most represent a mixture of both.

A restaurant provides a meal plus the service and a place to eat

A car dealership sells you the car and the service for the car plus the parts.

An R&D organization performs research as well as prototypes and models.

THE MISSION, VISION, AND STRATEGY OF THE ORGANIZATION

Supply strategy has been to congruent with organizational strategy. Therefore, the mission, vision, and strategy of the organization are the key drivers for how the supply function will be managed and how supply decisions are made and executed.

A non-profit organization with social aims may acquire their office supplies in a whole different way than an organization that competes in a tough commercial or consumer marketplace.

In the past supplier managers were only focused on the with the traditional determinants of quality, quanitity, price, delivery, and service as the FIVE KEY DRIVERS of sound supply decision. Today they have a host of additional concerns such as corporate mission, vision and strategies.

The old adage of value for money, a guiding principle of supply chain managers for centuries, has become a lot tougher and much more complex.

THE SIZE OF THE ORGANIZATION

The larger the amount of spend, the greater the time and care that has to be allocated to the purchase/acquisition. Therefore, in very small organizations the responsibility for acquisition may be a part-time allocation to one or more individuals who probably wear multiple hats. In very large organizations, supply professionals may be completely dedicated to one category of requirements on a full-time basis.

Example-Military acquisition in the USA occupies 40k people.

SINGLE OR MULTIPLE SITES

The supply situation gets harder if we are working out of different sites. This is especially true for multinationals supplying multiple sites in a large variety of countries.

FINANCIAL STRENGHT (supply mgmt= exchange of money 4 G or S)

The stronger the buying organization is financially, the more attractive it becomes to the suppliers. A supplier will be more anxious to offer and exceptional good value proposition to an attractive customer.

EXAMPLE- WALMART, SORIANA, HEB, IBM, APPLE

REPUTATION

Corporate reputation in the trade is another important factor in building a positive image for both the supplier and the customer. If supply management is defined as the fight for superior suppliers, then a strong corporate image and reputation are valuable contributors.

THE COMPANY YOU KEEP KNOWS YOU!

CHALLENGES AHEAD…

There are at least six major challenges that supply professionals will face in the next decade.

SUPPLY CHAIN MANAGEMENT

The successes of firms like Wal-Mart and Zara in exploiting supply chain management helped popularize the whole field of supply chain management. Nevertheless the challenge remains: While huge companies can force the various members of the supply chain to do their bidding, smaller companies don’t have that luxury. Each organization has to determine for itself how far it can extend its sphere of influence within the supply chain and how to respond to supply chain initiative by others.

MEASUREMENT

How to Asses the benefits of various supply experiments?

Finding the right set of measures most appropriate for a particular organization circumstances is part of the measurement challenge.

RISK MANAGEMENT

A recent study by MSU found that supply chain management disruptions and supply chain risk are among the most critical issues facing supply chain managers. Since Supply chains have become increasingly global and, therefore, face risks of supply interruptions, financial and exchange rates fluctuations, lead times variability, and security and protection or intellectual property rights.

Supply managers need to continually asses risks in the supply chain and balance risk/reward opportunities when making supply decisions.

Example-The lower prices of an off shore supplier may create longer-term high costs as a result of the need to carry additional safety stock inventories or lost sales from stock-outs.

SUSTAINABILITY

Pressures from government and consumer groups are motivating organizations to reduce the impact of their supply chain o the natural environment. For example, the European Union has set aggressive targets for greenhouse gas reductions and cuts to overall energy consumptions, and has implemented new legislation as a result. Supply will be at the forefront of sustainability initiatives. Senior management will expect supply to work with suppliers to identify solutions for the environmental and sustainability challenges they face.

GROWTH AND INFLUENCE

Growth and influence in terms of the role of supply and its responsibilities inside an organization can be represented in four areas as identified in a CAPS study.

1ST- Supply can grow in the percentage of the organization’s total spend for which it is meaningfully involved. Thus, categories of spent traditionally not involved involving purchasing such as real estate, insurance, energy, benefit programs, part-time help, relocation services, consulting, marketing, ITM logistics have become part of the procurement’s responsibility in more progressive corporations.

2nd- The growth of supply responsibilities can be seen in the span of supply activities under purchasing or supply leadership. Recent additions include accounts payable, legal, training, and recruiting, programs and customer bid support, and involvement with new business developments.

3rd- In the highest level, meaningful involvement, a term first coined by

Dr. Ian Stuart represents true member status for supply at the executive table. Thus the question in any major decision is not only “What are the financial implications?” BUT ALSO “What are the supply implications of this decision?”

4th- Supply can grow by its involvement in corporate activities from which it might have been previously excluded.

Examples-strategic planning, mergers and acquisitions, visionary task forces, and initial project planning.

EFFECTIVE CONTRIBUTION TO ORGANIZATIONAL SUCCESS

Contributing operationally and strategically, directly and indirectly, and in a positive mode, the challenge for supply is to be an effective team member.

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