Quản trị kinh doanh - Chapter 7: Purchasing procedures, e - Procurement, and systems contracting

1Chapter 7:Purchasing Procedures, E-Procurement, andSystems ContractingPurchasing and Supply Chain Management, 3rd edition, Copyright 2013, W. C. Benton Jr., All rights reservedPurchasing Department's ObjectivesSpend corporate funds wisely.Operate in a professional manner.Purchase: the right materials in the right quantitiesat the right time and pricefrom the right source.Practice the highest level of ethical standards to ensure confidence among all parties.2General DefinitionsPurchasing process:Buying goods and services for use by the buying organizationBuying process:Procuring items for resaleThese terms are sometimes used interchangeably.3Purchasing Department's Main FunctionsDetermine the supplier.Negotiate the actual price.Determine the delivery date. More than 75 % of a firm’s procurement activities are routine.Thus, becoming increasingly automated.4Purchasing ToolsSystems contractingE-Procurement Reverse auctionsElectronic Data Interchange (EDI)Radio Frequency Identification (RFID) 5Systems Contracting (cont.)Requirements: A negotiated agreement between buyers and sellers including:Type of materialScope of contractPriceBilling policyStocking policyDelivery requirements6Purchasing ToolsSystems contractingE-Procurement 7E-procurementPotential Savings:Inventory and purchase costsDetriments:Total cost of implementing these systemsLack of savings during development and deployment phases Cost of training employees and getting suppliers to participate8Reverse AuctionsCharacteristics:The buying firm initializes the auction by submitting a description of the product or service.Sellers place bids based on their offer to fulfill the buyer’s needs.The competition between the sellers drives the price down, instead of up.The buyer chooses the winning bidder.9Purchasing ToolsElectronic Data Interchange (EDI) Radio Frequency Identification (RFID) 10Questions?11