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Comprehensive Overview of Procurement and Distribution Strategies in Purchasing

This chapter focuses on the essential activities and processes within procurement and distribution, specifically addressing the purchasing cycle, supplier selection, and order management. It explores the "make or buy" decision through breakeven analysis and emphasizes Just-In-Time (JIT) purchasing, supplier audits, and relationship dynamics. Additionally, the chapter covers modern supply chain tools such as barcoding, EDI, and RFID technology, highlighting their importance in enhancing operational efficiency. Finally, insights into e-commerce, CRM, B2B, B2C, and e-procurement systems are presented.

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Comprehensive Overview of Procurement and Distribution Strategies in Purchasing

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  1. Week 12A – Procurement & Distribution Chapter 11 Purchasing, make or buy, DRP SJSU Bus 140 - David Bentley

  2. Purchasing - 1 • Purchasing activities and interfaces • Purchasing cycle • Requisition from user or inventory control • Supplier selection • Order placement • Order monitoring and follow-up • Order receipt • Outsourcing • Contract manufacturers SJSU Bus 140 - David Bentley

  3. Purchasing - 2 • “JIT” purchasing • Fewer suppliers • More contracts • Traditional vs. partnership relationships • Next 2 slides • Supplier selection • Supplier audits and certification • May use standard industry certifications SJSU Bus 140 - David Bentley

  4. Supplier Relationships – 1Source: Schonberger & Knod, Operations Management, Fourth Edition, 1991 SJSU Bus 140 - David Bentley

  5. Supplier Relationships – 2Source: Schonberger & Knod, Operations Management, Fourth Edition, 1991 SJSU Bus 140 - David Bentley

  6. Purchasing - 3 • Supply Chain Tools • Bar coding • EDI (Electronic Data Interchange) • RFID (Radio Frequency Identification) • E-commerce SJSU Bus 140 - David Bentley

  7. Purchasing - 4 • Make or buy (breakeven analysis) • QBEP = FC / (p – v) • Distribution requirements planning (DRP) • Aggregate requirements from stores • Assign through warehouses to factories SJSU Bus 140 - David Bentley

  8. E-Commerce Areas • CRM - Oracle (including Seibel), BroadVision • B2B - SAP, Oracle • B2C - BroadVision • SCM - SAP, i2 • E-Procurement - SAP, Ariba SJSU Bus 140 - David Bentley

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