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Chapter 4

Chapter 4. Purchasing Relationships with • Other functional areas • The Supplier community. A Philosophy of Integration. Closely working with other functional areas Professional association with suppliers. Purchasing’s Relationships within the firm. Engineering Quality Assurance

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Chapter 4

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  1. Chapter 4 Purchasing Relationships with • Other functional areas • The Supplier community

  2. A Philosophy of Integration • Closely working with other functional areas • Professional association with suppliers

  3. Purchasing’s Relationships within the firm • Engineering • Quality Assurance • Operations • Accounting and finance • Marketing • Transportation • Legal Office

  4. Relationships with Suppliers under a new philosophy • Awareness of the supplier community • Open communication with suppliers including ESI • Co-location of a supplier • Cross Functional Teams • New Product Development

  5. Obstacles to the New Philosophy with suppliers • Resistance to change • “Old School” Buyers • Senior Management • Confidentiality • Market-Power imbalance with a supplier

  6. The Team Approach • Share knowledge, expertise, and ideas • Different perspectives on the issue • Faster resolution of the problem • Faster product development • Sense of “buy in” to design or decision

  7. Cross Functional Teams • Source selection and contract negotiation • Solving supplier problems • New product development • Commodity Teams • Engineering Change Proposals • Special tasks or activities (supplier certification, developing a materials catalog or a PPM are examples)

  8. The Engineering Change Process ECPs may be originated by engineering, quality, operations, marketing, or the supplier Engineering Change Proposal (ECP) A Cross Functional Team Engineering Change Board or Engineering Change Order (ECO) Rejected

  9. Team Approaches Team Duration Member Commitment Ad Hoc Continuous Full time Part Time

  10. Team Approaches Team Duration Member Commitment Ad Hoc Continuous Full time Part Time

  11. Team Approaches Team Duration Member Commitment Ad Hoc Continuous Source Selection Full time Source Selection Commodity Teams Part Time

  12. Advantages to the team approach • Enhanced communication • Synergy in idea sharing, perspectives, decisions • Expeditious decisions and actions • Joint ownership of decisions

  13. Prerequisites to successful CFTs • Support of senior management and all division executives • Executive sponsorship

  14. Prerequisites to successful CFTs, cont. • Effective Team Leaders • Qualified, motivated team members • Adequate time and resources

  15. Impediments to the team concept • Selling the concept • Time availability of team members and the issue of overload • Role conflicts • No system of rewards

  16. Why some teams fall short • Process Loss • Groupthink and teams arrive at poor decisions There is nothing inherently good or bad about the team approach. Teams have the potential for great achievement and contribution. However, teams frequently fail in meeting expected results.

  17. Let’s move on

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