PROCUREMENT AND LABORATORY SUPPLY...
Transcript of PROCUREMENT AND LABORATORY SUPPLY...
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PROCUREMENT AND LABORATORY SUPPLY CHAIN
Presentation by
Timothy Nyanamba
21st June 2013
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Outline
1. Introduction
1. Supply Chain, supply chain management
2. Procurement objectives
3. Methods used in procurement
4. ILRI purchased product matrix
5. Inventory Management
6. Challenges in supply chain
7. Role of finance 2
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Introduction
Supply chain
The movement of materials source to the end customer. - includes procurement, storage, transportation, customer service, demand planning, supply planning, supply chain management
- made up of the people, activities, information and resources involved in moving a product from its supplier to customer.
- Material, information and financial flows 3
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Supply chain management
-deals with linking the organizations within the supply chain in order to meet demand across the chain as efficiently as possible
-three goals of SCM: i) to optimise inventory;
ii) to increase the speed of transactions
iii) Achieve research objectives satisfying client demands more efficiently.
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Procurement
The process of procurement is often part of a ILRI’s strategy because the ability to purchase research materials and other products will determine if operations will continue.
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Procurement objectives
1. Support Operational Requirements
2. Manage the Procurement Process and the Supply Base Efficiently and Effectively
3. Develop Strong Relationships with Other
Functional Groups 4. Support Organizational Goals and
Objectives
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1. Support Operational Requirements
Buy products and services
-At the right price -From the right source -At the right specification that meets
users needs -In the right quantity -For delivery at the right time -To the right internal customer
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2. Manage Procurement Process and the Supply Base Efficiently and Effectively
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a) Identify opportunities -Evaluation and selection of suppliers -Review of specifications -Act as primary contact with supplier -Managing the supply base
>Current suppliers are competitive >Identification of new potential suppliers
and develop relationships >Improvement and development of non-
competitive existing suppliers b) Manage internal operations c) Achieve objectives
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3. Develop Strong Relationships with Other Functional Groups
By relating with internal customers to achieve greater understanding of requirements
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4. Support Organizational Goals and Objectives
i) Monitoring supply markets and trends and likely impact on ILRI strategies
ii) Identifying the critical materials and services required to support ILRI strategies esp. in research
iii) Developing supply options and contingency plans that support company plans
iv) Supporting the ILRI’s need for a diverse and globally competitive supply base
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The five steps in procurement process
i) Define the need ii) Develop specifications iii) Develop the Procurement Strategy iv) Supplier Selection and Evaluation v) Negotiation and award vi) Delivery vii) Payment
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ILRI purchased materials matrix
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Leverage items
Strategic items
Non-critical items
Bottleneck items
HIGH
IMPACT ON RESEARCH
HIGH
LOW SUPPLY RISK
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Procurement methods
1. Open tender
2. Other methods - Restricted tendering - Direct procurement - Request for proposals – services or
combination of goods & services - Request for quotations
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Inventory Management
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Objective To strike a balance between inventory investment and customer service
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Functions of inventory
1. To safeguard against fluctuations in supply/demand
2. To take advantage of quantity discounts
3. To hedge against inflation
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The ABC classification of inventory
- Used to establish policies that focus on the few critical parts and not the many trivial ones
- Divides inventory into three classes based on annual dollar volume
- Class A - high annual dollar volume - Class B - medium annual dollar
volume
- Class C - low annual dollar volume
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The ABC analysis
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C
A
B
Per
cen
t of
ann
ual
dol
lar
usa
ge
80 – 70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – | | | | | | | | | |
10 20 30 40 50 60 70 80 90 100
Percent of inventory items
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Policies employed in managing class A items
- More emphasis on supplier development for A items
- Tighter physical inventory control for A items
- More care in forecasting A items
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Relevant Inventory Costs
1. Ordering costs 2. Receiving and inspections
costs 3. Holding or carrying costs 4. Shortage costs
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Supply chain challenges
1. Quality challenges
2. Cost containment
3. Shortages in the market/ limited sources
4. Increasing customer demands; Changing research objectives
5. Poor supply chain visibility
6. Risk management
7. Government procedures e.g. duty exemption 20
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Role of Finance
- Make payments as per agreed or contract terms – advance, upon delivery, 30 days credit.
- Late payments = supply disruptions
- Caused by: - Manual processing of payments - Three-way matching – documents
not consistent - Missing documentation 21
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THANK YOU!
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International Livestock Research Institute Better lives through livestock
Animal agriculture to reduce poverty, hunger and ���environmental degradation in developing countries���
ILRI ���www.ilri.org
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