Scribd
Upload
16 views18 pages

Strategies for Purchasing and Support

Uploaded by

rayan rub
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
16 views18 pages

Strategies for Purchasing and Support

Uploaded by

rayan rub
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 18

Strategies for Purchasing and

Support Activities
A business
unit’s
processes
A business unit’s processes can be described
by its value chain (Fig. 1-9)
–Primary activities: Purchase, logistics,
design, manufacture, market, sell, after-sale
A business service & support
–Support activities: human resource, finance,
unit’s administration, technology development
processes
The potential for cost reductions and business
process improvements in purchasing, logistics
and supporting activities in huge
Purchasing activities
Identifying vendors, evaluating vendors,
selecting specific products, placing
orders and other activities related to
Purchasing, purchasing issues
Logistics, and Supply chain
Support Part of an industry value chain that
Activities precedes a particular strategic business
unit
Include all predecessors
Supply chain
for wodden
chair
 Purchasing activities include:
 Identifying vendors
 Evaluating vendors
Purchasing  Selecting specific products
Activities  Placing orders
 Resolving any issues that arise after receiving the
ordered goods and services
 Procurement includes all purchasing activities,
plus the monitoring of all elements of purchase
transactions.
 By using a Web site to process orders, the vendors
in this market can save the cost of printing and
shipping catalogs, and the cost of handling

Purchasing telephone orders.


 Products that companies buy on a recurring basis
Activities are called maintenance, repair, and operating
(MRO) supplies.
 One of the largest MRO suppliers in the world is
W.W. Grainger.McMaster-Carr is another major
MRO supplier through WWW.Office Depot and
Staples are also examples in this area.
 The classic objective of logistics is to provide the
right goods in the right quantities in the right
place at the right time.
Logistic  Businesses have been increasing their use of
Activities information technology to achieve this objective.
 FedEx and UPS have freight tracking Web page
available to their customers.
 Online Benefits is a firm that duplicates its clients’
human resource functions on a secure Web site
that is accessible to clients’ employees.

Support  Support activities include:

Activities  Finance and administration


 Human resources
 Technology development
 Knowledge management is another support
activity that intentional collection, classification,
Knowledge and dissemination of information about a

Managemen company, its products, and its processes.


 BroadVision has installed K-Net, or Knowledge
t Network, that organizes all information sources
that its employees use regularly in their jobs.
 EDI is a computer-to-computer transfer of business
Electronic information between two businesses that uses a
standard format.
Data  Transaction data in B2B transactions includes the
Interchang information on paper invoices, purchase orders,

e (EDI) requests for quotations, bills of lading, and


receiving reports.
 The part of an industry value chain that precedes
Supply a particular strategic business unit is often called a

Chain supply chain.


 The purchasing department has traditionally been
Manageme charged with buying all of these components at
nt the lowest price possible.
 The process of taking an active role in working
with suppliers to improve products and processes
is called supply chain management (SCM).SCM
Value was originally developed as a way to reduce costs.

Creation in  Today, SCM is used to add value in the form of


the Supply benefits to the ultimate consumer at the end of
the supply chain.Supply chain members can
Chain reduce costs and increase the value of product or
service to the ultimate customer.
 Clear communications, and quick responses to

Technology those communications, are a key element of


successful SCM.
in the  Technologies of the Internet and the Web can be
Supply very effective communication enhancers.

Chain  Figure 9-10 lists the advantages of using Internet


and Web technologies in SCM
 In 1997, production and scheduling errors costing
Boeing over $1.5 billion.
 Using EDI and Internet links, Boeing is working
with suppliers so that they can provide the right

Technology
part at the right time.
 To further benefit customers, Boeing launched a
in the spare parts Web site, Boeing PART

Supply  Dell Computer has also used technology-enabled

Chain SCM to give customers exactly what they want.


 Dell has been able to dramatically reduce the
amount of inventory it must hold.
 Dell has also shared this information with
members of its supply chain
 Enterprise resource planning (ERP) software is

Enterprise designed to help a company integrate all of its


manufacturing, finance, distribution, and other
Resource internal business functions into one information

Planning system.
 Major ERP vendors include J.D. Edwards, Oracle,
Software PeopleSoft, and SAP.
 B2B commerce software is designed to help
companies build Web sites that host catalog and
other commercial sales activities.
Business-to-  Netscape’s SellerXpert and Open Market’s
Business LiveCommerce-Transact combination are full-
(B2B) featured products that help companies put
Commerce catalogs online.

Software  The other B2B commerce software packages are


toolkits that help the customer custom configure
catalog and order management systems.
Supply  Supply chain management software includes
demand forecasting tools and planning capabilities
Chain to coordinate various activities.

Manageme  Currently, the two major firms offering SCM

nt software are i2 Technologies and Manugistics.

Software

You might also like