Kategori arşivi: Purchasing

Procurement Action Against Inflation

How purchasing managers, commodity managers , sourcing leaders are taking actions related to inflation and continued uncertainty.

Inflation is one of the important problem of all procurement professionals minds right now. US Inflation Rate is at 8.52%, compared to 9.06% last month and 5.37% last year. This is higher than the long term average of 3.26%. Euro area annual consumer inflation jumped to a new record high of 9.1% in August, according to a flash estimate from the EU’s statistical office on Wednesday. The figure was up from 8.9% in July, Eurostat data showed.

Inflation has forced purchasing managers, commodity managers , sourcing leaders to take action, What are these actions?

1.Finding new suppliers to lower costs

2. Establish price change mechanisms.

3.Renegotiating contracts with existing suppliers

4. Understand your major cost drivers like Direct material · Direct labour · Manufacturing overhead · General selling & administrative · Profit

Fighting against rising inflation is not an easy job. However, by creating risk management strategies and strong supplier relationships in place, procurement managers can minimize high Inflation rate risks.

Agile Sourcing

Agile methodology is a project management technique born out of software development.

Agile procurement is an altenative tool in the procurement toolbox, to be utilised for the right projects at the right time.

Agile sourcing is using of agile principles to make sourcing processes faster and more effective.

Traditional procurement works on classical rules. Most of the time,decisions are not fast and is taking time.

Traditional procurement involves fixed deliverables, extensive documentation and a comprehensive project plan.

In an agile approach, you need to have frequent communication and collaboration during the supplier selection process.

Step 1 : Build a cross functional team involving all people that have impact in the vendor selection process, and those who will have to work day to day with the future team.

Step 2: Establish common goals and inform pre-selected vendors related to new selection process.Send out the presentation agenda and guidelines in advance.

Step 3: Run the selection workshop . All vendors came with the commercial and technical team that would actually work with you and required people that could build a proposal and decide on prices.

Step 4 : At the conclusion of the presentations and after your review, present the selected supplier. The decision was taken and announced to all vendors at the end of workshop. Contract is drafted, negotiated and signed.

Indirect Spend Categories to Make Cost Reduction

Over the past five years, purchasing/supply groups in well-managed companies have made significant progress in reducing the price of inputs. Since specific direct materials are often associated with distinct Strategic Business Units (SBUs), managing this spend is usually accomplished through center-led commodity groups, with sourcing decisions and administration occurring at the SBU. Though most companies are generally satisfied with the efforts they have made in strategically sourcing their direct goods and services, most companies are still attempting to gain comparable control and results with their indirect spend.

Indirect spend is receiving increased attention from the senior management of large corporations. On average, indirect spend equals about 50 percent of a company’s purchases. Unfortunately, a significant amount of indirect spend is not purchased using the organization’s purchasing/supply function or purchasing processes. Senior management has realized that reducing or eliminating indirect spend offers an opportunity to favourably affect a company’s cost structure. Examples of indirect spend include: professional services, utilities, company travel, office products, and waste Management, facility management e.t.c However, spend that is indirect for one company may be direct for another. Furthermore, segmenting direct and indirect spend can be very difficult, particularly for service companies.

With increased outsourcing of non-core capabilities, the growth of the service sector, and increasing cost pressure, the importance of managing indirect spend is increasing.  A recent survey conducted by The Aberdeen Group recently reported that about 70 percent of procurement executives cite indirect spend as a top focus for controlling and reducing cost. Procurement executives know that indirect category management now presents a significant opportunity for cost management, gross profit and margin growth. More procurement groups now seek to drive a larger volume of contracts through their organizations. They want to manage and negotiate better rates and achieve tighter compliance with both financial and regulatory controls. And they believe that more attention to indirect spend and the multitude of suppliers in those categories can yield savings without distracting management attention from compliance or strategy.

Some of the top 5 Categories where companies can successfully achieve significant savings in indirect spend include:

Marketing Services

Marketing spend is defined as `external expenditures on services related to marketing’. Marketing spend categories usually include printing services compatible to goods,  agency/creative services, and other non-creative services,  Buying Marketing Services is often regarded as one of the highest budget areas within an organisation, hence the role for Procurement has increased considerably in recent years focusing on improving quality, delivery times and innovation.

 

Waste Management

Waste management is the “generation, prevention, characterization, monitoring, treatment, handling, reuse and residual disposition of solid wastes”. There are various types of solid waste including municipal (residential, institutional, commercial), agricultural, and special (health care, household hazardous wastes, sewage sludge). The term usually relates to materials produced by human activity, and the process is generally undertaken to reduce their effect on health, the environment or aesthetics.

 

Professional Services

Organisations often employ professional services for assistance with strategy, management, and other functional services such as legal, Human Resources etc.  Procurement can demonstrate value by providing insight to spend, supplier sourcing, realising savings and organising efficient, economical purchasing processes.

 

Office Supplies

Office Supplies can be defined as all items which have the objective of retaining or restoring a piece of equipment or system, to a state in which it can perform its required function. These are items which are used in production but do not become part of the end product and include hand tools, spare parts, lubricants and cleaning supplies e.t.c. They are goods acquired for the purpose of current operation; items that are consumable, sometimes perishable or short lived, and are subject to material change. They could also be items of a durable nature such as wastebaskets, small tools, bookends, file cabinets, chairs, calculators.

 

Facilities Management

Procurement is often involved with many of the services bought in, to support the building and people within an organisation – often referred as Facilities management (FM). FM is a significant area of spend for most organisations, traditionally defined as soft (people focused) and hard (engineering focused). Approaches for managing FM may be centralised or decentralised, either through several direct contractors or via an integrated FM supplier which provides all services.

Steel Casting Cost Factors

Steel Casting Cost Factors

According to  Emcasting company, there are 5 factors that are affecting steel  casting part price

1-Geometry and shape of part

Internal cavities, quantity and thickness of cores, thin walls, long parts, complicated shapes, more than one parting line requirement, non linear parting lines, reverse angles and non symmetrical parts etc. will increase sand casting piece prices.

Mentioned complexities will increase casting defects such as cold lap, core replacement, flash, mismatch, raised core, deformation etc.

2-Alloy and alloying elements

The alloying element(Silicon, manganese, Chromium, Titanium, molybdenum, nickel, niobium and vanadium etc) quantity and tight  standards will also increase the prices.

3-Order quantity,yearly volume,

Low volume means higher pieces prices.

4-Required Mechanical properties and heat treatment

Annealing and normalizing are usual heat treatment of steel parts that are used to homogenizing micro structure and decreasing solidification stresses.

In some cases to achieve required properties, multiple and costly heat treatments are used. 

5-Requested tests according to safety and critical application

ASTM’s nondestructive testing  techniques used to detect and evaluate flaws in materials and objects without destroying the specimen at hand. Such tests include radiographic, ultrasonic, electromagnetic (eddy-current), X-ray, acoustic, and tomographic techniques. These tests are costly and might increase the cost of  steel  casting part price.

 

 

 

 

Düşük maliyetli ülkelerden satınalma yapmak

Düşük maliyetli ülkelerden satınalma yapmak artık günümüzde bütün firmaların satınalma bölümlerinin izlediği bir strateji haline gelmiştir.

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Dövme prosesi ile Döküm prosesinin karşılaştırılması

Dövme prosesi ile Döküm prosesi ile parça üretimi yıllardır birbiriyle kıyaslanmaktadır.Hem dövme yönteminin hem de döküm yönteminin kendine göre avantajları ve dezavantajları mevcuttur.Dövme yöntemi ile elde edilen parçalar döküme göre boşluksuz yapıda olduğu için daha güvenli olduğu söylenebilir.

Ayrıca dövme kalıplarının maliyetleri, döküm modellerinin maliyetlerine göre daha pahalıdır.

Daha ayrıntılı bir karşılaştırma için aşağıdaki yazıyı okuyabilirsiniz.

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Teşekkürler

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