Premium Essay

Purchasing

In: Business and Management

Submitted By 22102004nlc
Words 1452
Pages 6
WAREHOUSE ACTIVITY PROFILING: MINING FOR GOLD
CHAPTER 2

Warehouse activity profiling
• Warehouse activity profiling is the systematic analysis of item and order activity. • The activity profiling process is designed to quickly identify root causes of material and information flow problems, to pinpoint major opportunities for process improvements, and to provide an objective basis for project-team decision making.

PROFILING MOTIVATIONS AND MINEFIELDS
• Profiling Pays
▫ Done properly, profiling quickly reveals warehouse design and planning opportunities that might not naturally be in front of you.

• You can drown in a shallow lake — on average
▫ If we are not careful to plan and design based on distributions as opposed to averages, the entire planning and design process will be flawed. That is why it is so important to go to the extra step to derive these profile distributions. As you start to look at the profiles of customer orders, purchase orders, item activity, inventory levels, and so on, the creative juices begin to flow for everyone on the project team. Everyone on the project team starts making good decisions and generating new ideas.
In profiling, we are trying to capture the activity of the warehouse in pictorial form so we can present the information to management and so we can make quick consensus decisions as a team. A full, yet minimum set of profiles required to plan and design warehouse operations follows. This profile set is a synthesis of profiles built in a wide variety of warehouse project settings. They are presented to you as an example of the set of profiles you should have to effectively plan and manage your warehouse operations. The profile set stems directly from the seven key planning and design issues in warehousing (see Table 2-1).

• Wallowing in the Data Stimulates Creative Thinking


• A Picture is Worth 1,000…...

Similar Documents

Premium Essay

Purchasing Cycle

...IV. Purchasing Cycle Ordering materials, supplies and services The Purchasing Group is responsible for receiving Purchase Order request forms from different departments. Usually, the majority of orders come from Planning Department because they use JIT inventory system to schedule production runs. Once the order request is approved by upper management, the purchaser will choose a vendor and decide if a Purchase Order (PO) is needed. Practically, PO will not be required for minor purchases that are less than $1,000 such as office supplies, lunches etc. For those purchases, the purchaser will contact the preferred vendors to place orders and pay them with the American Express credit card. The Purchase Order request forms are then completed for filing purposes. If the purchase exceeds $1,000, a PO is created. The purchaser will select a vendor, send them the PO and receive a confirmation number. If the shipment is delayed, the purchaser will contact backup vendors for immediately needed parts. Receiving Deliveries from vendors are handled by the Receiving Department. The docking clerk checks Bill of Lading (BOL) and Packing Slip for correct shipments. All incoming deliveries with right addresses are received at the dock. After blind receiving the products, the raw material handler will compare the actual receipt of goods with the quantity of goods on BOL and packing slip. All shipments are subject to inspection for any defected items. The raw material handler will notify......

Words: 476 - Pages: 2

Premium Essay

Purchasing an Mri

...department overhead will include scheduling, billing, nursing support, office equipment, and the salary of the MRI radiology technician, which is around $65,000 a year. The cost per year to operate the new MRI machine would be around $400,000 (Gayler 2007). Because the old MRI machine is larger, we will incur construction costs to update the electrical panels. Heating/air conditioning and ventilation may need to be redone, and new ceiling-mounted equipment and flooring will have to be calculated for different weight measurements and the installation of new x-ray shielding. This is all based on the new state and federal guidelines requirement changes for x-ray equipment (Gayler, 2007). The return on investment (ROI) for purchasing an MRI machine is significant once the upfront cost has been paid. The going rate for doing an MRI procedure ranges around $2,500–$4000, so it will be an easy undertaking for the hospital to recover the cost of the MRI. The hospital is also able to charge for the MRI radiologist to analyze the MRI scan at a usual cost of around $450. This is also another revenue generator for the hospital and contributes to the ROI of the MRI machine. General Electric, which manufactures the MRI machine, has indicated that the equipment has a life span of up to 12 years, but the initial warranty is only good for 6 years (Signa HDxt 3.OT, 2013). One of the significant advantages of the new MRI machine is that it is a great diagnostic tool......

Words: 930 - Pages: 4

Premium Essay

Plan Purchasing

...Plan Purchasing Why do organisations commit to resource and time to evaluate suppliers before making a supplier selection decision? Selecting suppliers is one of the most important activities performed by companies. Mistakes during this process can lead to damaging and expensive problems like delivery delays and quality issues, and long-lasting consequences. Choosing the right supplier is strategically important when an organisation tries to reduce its supplier base to maximise costs and procurement processes. The risks that come with a reduced supplier base (over dependency on a single supplier, danger of supply disruption, difficulties in finding a new supplier) make the selection process a vital business decision. The possible ways that purchasing becomes aware of the need to evaluate and select a supplier. The decision to start a supplier selection and evaluation process follows the recognition of a requirement or need. This can come in many different ways: - New products development plans: The purchasing might have an early insight into new product development plans where the preliminary specifications about materials, service or processes required are disclosed. - Poor supplier performance: When the supplier’s performances are poor it becomes necessary to source a new supplier that can efficiently meet the organisation`s requirements. - When current suppliers have insufficient capacity: If the actual supplier is not able to......

Words: 920 - Pages: 4

Premium Essay

Supply Purchasing

...in this assignment is solely my own other than where explicitly acknowledged to be otherwise. I assert that the preparation of this work has been completed in accordance with ethical standards appropriate to students of UNSW@ADFA and is a true representation of my current capabilities in this course. What factor or factors would give a firm market power as a purchaser? How might a firm possessing market power use procurement to build and sustain competitive advantage derived from (end) product innovation? In being able to determine any single or set of contributing factors that may give a firm market power as a purchaser, it is best to first agree a definition for market power and how it applies to purchasing. In its broadest definition market power can be defined as the ability of a firm to be able to influence or control terms and or conditions on which goods are bought and sold. There are also numerous schools of thought as to what precisely constitutes market or buyer power. The traditional sense is to define it in terms as an inverse of a monopoly, whereby the buyer can set prices profitably below competitive levels, in what some label a monopsony where there is either only one or a concentrated number of buyers within a competitive selling market (Mellsop and Counsell 2009). However a more holistic approach to buyer power is rather than forcing lower prices, being able to negotiate more favourable terms. However, market power......

Words: 2316 - Pages: 10

Free Essay

Capital Purchasing

...specific time limit but have such a limited space. Productivity growth also helps businesses to be more profitable. According to Sue Grossbauer (2001), before a purchasing decision is made for capital item, there are seven steps should be followed: The first step is determined a need, typically, the dietary manager and other staff members in the dietary department recognized the need for equipment purchases. There may be recurring problems; existing equipment may break down and may not be worth repair costs, manufacturers may introduce new items of great interest or benefit to the facility; or new services models may be pending. The second step is consider the budget, since the purchase of large equipment items will involve significant expense, those items general must be included and approved in a capital budget separate from the department’s operating budget. The third step is, investigate options, a dietary manager may investigate options with a number or suppliers, or with a manufacturer’s representative a starting point is any known requirements. From this, a dietary management can check available sources compare features and specifications, and refine needs list. The fourth step is, Consult with others in the organization, facility staff play a role in the equipment purchase. In large facilities with a purchasing department, personnel with this responsibility may obtain general information from equipment suppliers about potentially useful items, and help develop......

Words: 1235 - Pages: 5

Premium Essay

Purchasing Process

...Purchasing process The buying proses depend of the consumer needs. From the different consumer needs the proses make differently. When my headphones were broken it became my big problem that created new needs to buy another headphones. I didn’t know anything about the different kind of headphones I decided to make a research, because I am the person who thinks that the price should be equal to quality of the good. First of all before buying anything I try to find more information about the product in the social media, like blogges, facebook, google and read the comments of different people. After all I asked my friends’ advice what kind of good I suppose to buy. From the all our conversation and the information from the social media I made a conclusion about what brand and type is better. After that I went to big technical stores in order to try and test the product that I prefer. There I didn’t only test the product and also I knew about other type of goods and brands. I was interested in the quality of the headphones’ sound an also I would like it to be comfortable for me to wear it. On the other hand I didn’t care about their brand, color, design, ads and ctr. After the whole testing proses I choose three types of the headpones and I make a research about it price through the internet. Then I call to different stores where this type of the product does exist and chose the better price for me( the cheapest one) and I go there and I buy it or if its possible I......

Words: 284 - Pages: 2

Premium Essay

Purchasing Strategy

...government regulation which led to the increase of excise duties levied on the alcoholic products classified as potentially harmful. Outsourcing also helped to improve efficiency and meet changing consumer needs since non core activities take up a lot of management time allowing them to concentrate on consumer needs. The company also established a shared services centre , a hub which would perform given functions for the whole company such as financial accounting and reporting activities for the group. The procurement and information systems services are also centralized therefore reducing costs associated with duplication of services among the subsidiaries. From the perspective of purchasing, a major implication of cost leadership strategy at business unit level was an emphasis on cost reduction. Purchasing strategies were therefore revised as price became paramount in the negotiations with suppliers in the outsourcing strategy process. Supplier relationship management and performance monitoring systems became vital as was reliability of delivery which needed to be guaranteed. Make (do) or buy approach was a strategic choice which had to be made in the procurement of the identified services. The company engaged the procurement function to source for cheaper and more readily available sorghum instead of barley in beer production. Differentiation:(unique products and services offering) East African Breweries applied differentiation strategy by matching consumer......

Words: 1901 - Pages: 8

Premium Essay

Purchasing

...Evolution of PURCHASING YEAR II SEMESTER I INETRNATIONAL TRANSPORTATION MANAGEMENT AND LOGISTICS BATCH (08) * SUBJECT NAME - INTRODUCTION TO LOGISTICS * ASSIGNMENT - EVOLUTION OF PURCHASING * GROUP NO - (04) * GROUP MEMBERS - SACHINTHA SIRIWARDENE (0021) UJITH PRAMODA (0022) SANDESHA KATIPEARACHCHI () HESHAN WIJETHILAKA () GIHAN FERNANDO () NILANKA DILSHANI () CONTENT (1.0) What is purchasing? (2.0) Purchasing Process. (3.1) Recognizing a need (3.2) Identifying a Supplier (3.3) Qualifying and Placing an order (3.4) Monitoring and managing the delivery process (3.5) Evaluating the purchase and the supplier (3.0) History of Purchasing. (4.6) Origins of purchasing/Procurement (4.7) Procurement developments in ancient history. (4.0) Purchasing Goals. (5.8) Broad purchasing goals (5.9) Different purchasing goals and their priorities (5.0) Importance of purchasing for an Organization. (6.0) New Trends in purchasing. (7.10) e-Purchasing (7.11) Values of e-Purchasing (7.12) Procurement outsourcing (7.13) Values of Procurement outsourcing (7.0) Conclusion. (1.0) What is Purchasing? For most organization purchasing means buying goods to resell or carry out operations or to manufacture products. “Purchasing......

Words: 1395 - Pages: 6

Premium Essay

Purchasing

...Electronic procurement (e-procurement) is the process of electronically purchasing the goods and services needed for an organization’s operation. It entails implementing electronic means to process publish exchange and store information concerning procurement without a paper medium. Hence it consists of publishing calls for tenders on the internet, sending out documents and specifications consultation files for companies, binding tender forms, etc   38 2.4.2 Factors/ drivers for adoption e-procurement In general a number of factors might hinder or influence the adoption of e- procurement in an organization including; inadequate technological infrastructure, lack of skilled personnel, inadequate technological infrastructure of partners, lack of integration with business, implementation costs, company culture, inadequate  business processes to support e-procurement, regulatory and legal controls, security, co-operation of business partners capacity, inadequate e-procurement solutions, upper management support (Chipiro, 2009). Shakir et all, (2007) identified several driver/barriers for adoption of e-procurement;   Economic: Little benefit to vendors, vendors’ concerns about costs, vendors’ fear of competitive bidding because of its adverse effect on price, insufficient internal resources to support e-procurement  Operational: vendors’ concerns about required changes in work processes, lack of skilled personnel, particularly when the vendor is required to  populate, update,...

Words: 3170 - Pages: 13

Premium Essay

Purchasing

...INTM 443/543 PURCHASING FALL 2013 RESEARCH PAPER GUIDELINES The research paper will replace a final exam. The paper will be due by November 26th, submitted via Blackboard. Grades for papers received after November 26th will be reduced by 10 points per day (100 points maximum grade). Topics for the research paper may be one of the following: 1. A discussion with your point of view on a current purchasing or supply management issue, for example: - What should purchasing managers be doing to deal with fluctuating commodity prices in the future? - How has e-Procurement impacted Purchasing’s approach to negotiating with suppliers? - Should companies continue to use outsourcing as a key purchasing strategy? - What are companies doing to create sustainable purchasing and supply management processes and products? 2. Research on how a specific company has developed new strategies and/or techniques to its supply chain and supplier relationships. IBM, Wal Mart, or Proctor & Gamble might be good choices. 3. Research on a significant purchasing issue from the past. The story of I. Lopez who headed up Purchasing at both Volkswagen and then General Motors is a good example. Topics must be approved by me in advance. Submit a brief statement of the topic and what you intend to do in terms of fact gathering, literature investigation, etc. Topics should be submitted by October 1st. Your paper should be 8 -...

Words: 343 - Pages: 2

Premium Essay

Sustainabe Purchasing

...Sustainable Purchasing Terrence Damp All businesses need inputs in order to be able to operate. These might be physical inputs, such as raw materials, like engine components for a car manufacturer. They may also be service-based, such as specialist engineering consultancy when trailing new technology or distribution services for a high street retailer. It is vital that inputs not only meet the required and reliability standards, but also those they are competitively priced. Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufactures, warehouses and stores, so that merchandise is produced and distributed at the right quantities, to the right locations and at the right time, in order to minimize system wide costs while satisfying service level requirements. For the oil and gas industry with its high levels of risk, the Chartered Institute of Purchasing & Supply (CIPS) is providing training to improve the efficiency and effectiveness of purchasing and supply. OPITO, the focal point for skills, learning and development in the oil and gas industry, undertook a labour market survey of the industry which identified a sector wide skills shortage. Oil & Gas UK then undertook a supply chain specialist for the oil and gas industry. The responsibility of an organization, the impact of its decisions and activities on society and the environment, resulting in transparent and ethical behavior which: Contributes to sustainable development,......

Words: 1125 - Pages: 5

Premium Essay

Purchasing Management

...Purchasing management is the critical business function to every organization as no organization can exist without suppliers’ support. Traditionally, purchasing was viewed as a clerical activity that only did some documental work required by other departments. There was usually no communication between purchasing and other departments within the organization. Also, suppliers were usually selected based on price and availability only. However, purchasing management has undergone a great change since 1960s. Organizations began to realize that purchasing can become a profit-making activity rather than just a profit-taking activity. A study performed by Carr and Pearson (2002) shows that purchasing management has a positive impact on the organization’s financial performance, no matter the firm is small or large in scale. It always plays a major role in the organization’s efforts to improve the quality of products and, in turn, market share. An effective purchasing management can improve the overall productivity, profitability, and return on investment of an organization. Therefore, in modern organizations, purchasing is viewed as a vital element in gaining competitive advantage. Coordination with other departments, such as marketing, production and financial, was augmented. Purchasing professionals nowadays are required to work across functional boundaries, for example, working with the production department to plan the schedule for goods acquired and delivered. More......

Words: 1106 - Pages: 5

Premium Essay

Centralized Purchasing

...Purchasing Centralized purchasing is when a company’s corporate office takes control of all the purchasing for the business.  This allows for central management and volume purchases that lead to better prices and terms as well as the ability to work with larger suppliers. This central control enables more efficient inventory control, lower staffing costs and a decrease in overheads. Staff also benefit with better training and support and the ability to build better relationships with suppliers. Many large companies either have experienced quick growth through mergers and acquisitions, and they often have several separate purchasing departments that are each responsible for purchasing a group of products. In a company with a local purchasing structure, departments purchase their own materials and supplies with minimal oversight from corporate. Some companies adopt a hybrid structure, in which some classes of items are purchased centrally and some are purchased locally; or a spending limit is given, with local managers responsible for purchasing goods up to a certain dollar amount. There are advantages to both centralized and a local purchasing program. A centralized program allows for fewer overheads, there is no a longer duplication of staff and the purchasing procedures are standardized. Centralized purchasing may bring better pricing and discounts based on volumes and freight charges and handling may be reduced with better volumes and fewer deliveries. Buyers......

Words: 1047 - Pages: 5

Premium Essay

Purchasing Procedures, E-Purchasing, and Systems Contracting

... PURCHASING PROCEDURES, E-PURCHASING, AND SYSTEMS CONTRACTING The purchasing department generates added value and profitability for the entire organization by communicating with suppliers to procure high-quality goods and services at the lowest cost and at the right time. This value is restricted by archaic and inefficient processes involving paper documents and time-consuming tasks. The E-Purchasing Solution automatically sends purchase orders, purchase requisition forms, etc… from SAP ensuring completion and timely approval of documents that are sent to your suppliers. You can easily track documents to verify they have effectively been sent ensuring that no order has been lost or misplaced. ERP FAX EMAIL Purchase order Purchase order copy Purchase order copy EMAIL Purchase department Production planning Accounting department Suppliers Purchase Manager Validation form by e-mail Automatic file Warehouse ERP FAX EMAIL Purchase order Purchase order copy Purchase order copy EMAIL Purchase department Production planning Accounting department Suppliers Purchase Manager Validation form by e-mail Automatic file Warehouse The Purchasing Policy The driving force behind any purchasing corporate policy considers the following objectives: 1. Spend corporate funds wisely. 2. Operate in a professional manner. 3. Purchase the right materials in the right quantities, at the right time and price, from the right source. 4. Practice the highest level of ethical......

Words: 1268 - Pages: 6

Premium Essay

Purchasing Procurment

...Purchasing Procurement at Northwell Health By INF 336: Project Procurement Management Instructor: Michael Chu February 7, 2016 In any business there is always the need to acquire goods and services from outside of your business. There is no company that can do it all themselves. No matter if you are a new business starting or a veteran in the industry there is going to be a time when some aspect of your business will be outsourced to another company. The healthcare industry is no stranger to this type of business transaction. The healthcare system utilizes many relationships between numerous distributors from patient gowns to surgical equipment a hospital needs to have a supplier for all kinds of goods and services to keep it going. Northwell Health is a large healthcare system that utilizes distributor relationships for various goods. For the purposes of this paper the administrative portion of the healthcare system will be used. Depending on what is needed in the different departments of the administrative locations Northwell Health relies on that distributor to get them the supplies they need. Most of the purchasing trends that go on in administrative areas are the usual pens, paper, ink cartridges and at times computer monitors, chairs, desks. For the most part the department can anticipate what supplies will be needed by keeping a log of supplies that need to be ordered and allowing all employees to put items they need on the log. Integrated suppliers try to be...

Words: 679 - Pages: 3