Procurement Of Api & Rawmaterial Management: Prepared & Presented By,

PROCUREMENT OF API & RAWMATERIAL MANAGEMENT

 PREPARED & PRESENTED BY,

q ISHAN.M. SHUKLA.

CONTENTS:  INTRODUCTION  PROCUREMENT &PRODUCTION         

MANAGEMENT. RAW MATERIAL MANGEMENT MATERIAL MANAGEMENT ACTIVITIES. PROCUREMENT: DEFINITION, PROCESS. PROCUREMENNT OF API. IMPORTANCE OF ITEMS & SERVICES PURCHASED. E-PROCUREMENT:ADV& DISADV. E-COMMERCE MODELS TYPES OF E-PROCUREMENT OTHER MATERIALS MANAGEMENT

 IT’S NOT ALWAYS ECONOMICAL FOR THE

COMPANIES TO MAKE ALL THE MATERIALS USED IN MANUFACTURING.  SOME ITEMS ARE PURCHASED FROM OTHERS & SOME ARE PRODUCED IN THE COMPANY. Ø CHOOSING B/W MAKING OR BUYING AN ITEM IS IMPORTANT DECISION TO BE TAKEN BY MATRERIAL MANAGEMENT.  REASONS FOR BUYING: vREASONS FOR MAKING:

MATERIAL MANAGEMENT:  “IT’S

PLANNING, DIRECTING, CONTROLLING & CO-ORDINATING THOSE ACTIVITIES WHICH ARE CONCERNED WITH MATERIALS & INVENTORY REQUIRED FROM POINT OF THEIR INCEPTIONS TO THEIR INTRODUCTION INTO THE MANUFACTURING PROCESS. ”  IT BEGINS WITH THE DETERMINATION OF MATERIAL QUALITY & QUANTITY ENDS WITH ISSUANCE TO PRODUCTION TO MEET COSUMER’S DEMAND AS PER SCHEDULE & AT THE LOWEST COST

STRATAGIC DECISION BY MATERIAL MANAGER 

F.W.I.

RAW MATERIAL

 STEEL

B.W.I. CURRENT

PRODUCTIO N

BUYERS

AUTOMOBILE

DEALERS

 SILICON

CIRCUITBOARDS

OBJECTIVE OF MATERIAL MANAGEMENT.

FUNCTIONS OF MATERIAL MANAGEMENT

Materials Management  Procurement method is the way of

ordering material.  Some of the new developments in this area include: 1) Electronic Ordering 2) Stockless Purchasing 3) Standardization, and 4) Just in Time Purchasing.

“ONE OF THE MAJOR ISSUE THAT MATERIAL MANAGER MIGHT ENCOUNTER IS THE METHOD OF PROCUREMENT” PROCUREMENT  SIMPLY THE WAY OF ORDERING THE MATERIAL  IDENTIFY REEVALUATE NEEDS.  DEFINE & EVALUATE USER REQUIREMENTS  DECIDE WHETHER TO MAKE OR BUY  IDENTIFY THE TYPE OF PURCHASES  CONDUCT A MARKET ANALYSIS  IDENTIFY ALL POSSIBLE SUPPLIERS.

PROCUREMENT  CONTRIBUTES    

TO THE COMPETITIVE ADVANTAGE OF THE FIRM, TREMENDOUS IMPACT OF MATERIAL COSTS ON PROFIT- 60 -70% OF SALES DOLLAR PAID TO MATERIAL SUPPLIERS SIGNIFICANT PORTION OF THE LOGISTICS COSTS POPULARITY OF JIT MANUFACTURING INCREASING GLOBAL COMPETITION

NEED ANALYSIS USER REQUIRMENTS MAKE OR BUY DECISION BUY

MAKE MAKE OR BUY SOME COMPONENTS

PURCHSE TYPE STRAIGHT BUY MODIFIED BUY NEW BUY

SELECT VENDOR MARKET ANALYSIS EVALUATE REMAINING SOURCES PRODUCT OR SERVICE DELIVERY POST PURCHASE PERFORMANCE EVALUATION

ITEM PROCUREMENT IMPORTANT MATRIX. HIGH

RISK LO W

LOW

VALUE/ PROFIT

HIGH

Importance of Item and Service Purchased  Products and services purchased by a

company are not all the same.  Some are more important than others and require greater procurement attention.  The quadrant technique enables the supply chain manager to assess the relative importance of each item based on the degree of perceived value and risk. 13

Electronic Ordering  It Provides Data Transfer For Any

Business Application, Including Purchasing.  For Example, Data For A Purchase Order (Such As Order Date, Due Date, Quantity, Part Number, Order Number, Address, Etc.) Are Fitted Into Standard EDI Format.

Stockless Purchasing  This Means That The Supplier

Maintains The Inventory For The Purchaser.  Here, The Cost Of Stocking Inventory Has Been Temporarily Transferred From The Purchaser To The Supplier.

Standardization  Rather Than Obtaining A Variety Of

Components Similar In Labeling, Coloring, Packaging, Etc. The Purchasing Agent Should Try To Have Those Components Standardized.  For Every Component That Is Standardized,  There Is One Less Invoice, One Less Item To Be Inventoried, Etc.

Just In Time Purchasing  This Waste And Delay is Present In All

Production Processes. (Not Only In Purchasing)  Therefore, JIT Approach Can Be Applied To All Areas Of Production.  ** The Basic JIT Approach: Every Moment Material Should Add Value.

Electronic Procurement  Business-to business (B2B) purchases are

estimated to be $1.3 to $2.0 trillion by 20036.  Former uses of electronic data interchange (EDI) were costly and required special technology to implement have given way to the publicly available Internet.  This has opened the door to increased applications of E-commerce techniques to procurement.

Purchasing

18

COMMON USERS OF E-PROCUREMENT.

 REASERCH VENDORS & PRODUCT     

INFORMATION. ELECTRONIC CHECK OF AVAILABLE STOCK PRICE NEGOTIATION ORDER PRODUCTS OR SERVICES. CHECK ON THE STATUS OF AN ORDER. ISSUE INVOICE AND RECEIVE PAYMENT. Purchasing

19

FOUR BASIC E-COMMERCE MODELS

E-PROCUREMENT:

TYPES OF E-PROCUREMENT

OTHER MATERIAL MANAGEMENT ACTIVITIES.  WAREHOUSING  TRANSPORTATION  PRODUCTION PLANNING & CONTROL  QUALITY CONTROL.

Transportation

Production Planning and Control

25

References:  Wickepedia.  Procurement data of cadila pharma  raw material management of sun

pharma.