Optimization of the supply department. Optimization of procurement and supply management. Types of materials requiring different purchasing approaches
In this article you will read about why an enterprise needs a procurement department, what structure of the procurement department can be considered optimal and how to organize effective management of the procurement department. Read on for answers to these questions, as well as detailed information about the roles and responsibilities of the procurement department.
Why does a company need a purchasing department?
Work of the supply department necessary in order to maintain a sufficient supply of goods in the enterprise. He is engaged in determining the company's needs for certain materials, goods, technical resources, as well as organizing their storage and issuance, controlling the purpose of the use of material and technical resources and promoting their savings.
When solving this problem, employees of the supply department will have to study, take into account supply and demand for all consumed material resources, as well as analyze the level and fluctuations of prices for products, for intermediary services, search for the most profitable option for distribution of goods, optimize their inventories, taking into account the reduction of warehouse and transport-procurement costs
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The main function of the supply department is the optimal, timely provision of appropriate material resources for production - of suitable quality and complexity.
What functions does the procurement department perform?
The functions of the procurement department are presented in 3 basic areas:
1) Planning, including:
Study of the internal and external environment of the enterprise, markets for individual products;
Forecasting, determining the enterprise's needs for material resources of all types with planning optimal economic relations;
Planning the need for materials with setting a limit on supplies to workshops;
Optimization of production inventories;
Operational supply planning.
2) Organizational functions:
Collecting information about product needs, participating in sales exhibitions, fairs, auctions, etc.
- analysis of sources of satisfying the need for material resources in order to determine the optimal one;
- obtaining and organizing the receipt of real resources;
- concluding business supply contracts with selected suppliers;
- providing sites, workshops, and workplaces with the necessary material resources;
- organization of warehousing, which is part of the supply authorities.
3) Control and coordination of work, including:
Monitoring the fulfillment of suppliers' obligations under contracts, delivery deadlines;
- incoming control of the complexity and quality of material resources supplied to the enterprise.
- control of production inventories;
- making claims against transport companies and suppliers;
- analysis of the work of the supply service, development of measures for coordinating supply activities, increasing the efficiency of its activities.
Supply department structure
Among the main factors determining the structure of the supply department, it should be noted:
1. Size of the enterprise;
2. Industry affiliation;
3. Type of production;
4. Number and geographical position suppliers;
5. Volumes and range of material resources consumed
6. Volumes and range of products produced.
The units that make up the supply service, their numbers and functions depend on these factors. The supply service is organized taking into account the experience of similar enterprises, as well as the requirements for the effective implementation of all supply functions.
When forming a supply department, the main condition is the principle of completeness and complexity - the structure must include all divisions that are involved in supply.
An important factor influencing the structure of the purchasing department is the size of the enterprise. Procurement departments will vary across businesses of different sizes. At large enterprises, a procurement, logistics and procurement management system is organized with different divisions and departments according to functions and areas of activity. At medium-sized enterprises, departments of material and technical supply, logistics and procurement are organized.
The management of material and technical supplies in small enterprises is dealt with by the head of the enterprise or his deputy - this is typical for non-productive enterprises. In a small enterprise, as it enlarges, a supply department can be formed. When creating a supply department in a company, all functions of warehousing, delivery, and inventory management are transferred to it.
Among the main types of organizational structures of the supply service are:
1. Functional structure:
Transportation Department;
Purchasing Department;
Planning and dispatch department;
Storage facilities;
Group of customs clearance of goods.
This structure of the supply department is suitable for medium-sized enterprises without a logistics department. The planning and dispatch department deals with procurement planning, control, regulation and analysis of the implementation of the supply plan. The functional structure is basic; its elements are present in other types of organizational structures of the supply service. In small enterprises, as a rule, the MTS service includes a transport department, a purchasing department and a warehouse.
2. Commodity structure. When an enterprise uses a wide range of material resources with significant volumes of purchases, commodity divisions that work with material resources can be formed in the supply service certain types. A similar structure is typical for large wholesale and manufacturing trading companies.
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Commodity divisions are engaged in the operational functions of supply and procurement of specific material resources. The planning and dispatch group is engaged in planning, monitoring and regulating the implementation of the supply plan. The customs clearance group ensures the registration of customs documents with the passage of materials purchased abroad through customs.
3. Market structure. When an enterprise purchases resources in various markets, or in different countries, regional divisions are formed in the supply service, working with suppliers from these markets (countries). As a result, it will be possible to take into account legal norms and the specifics of these markets.
4. Matrix structure of the supply service - is formed during the implementation of several projects in the company or during the release different types products. In this case, for each product or project, its own procurement unit is formed.
When a logistics service is created in a company, the transport, dispatch, customs clearance and warehouse departments are transferred to its structure.
Shops at large enterprises have their own supply departments involved in planning. Operational regulation of the supply of sites and workshops with material resources. These divisions have their own warehouses, receiving material resources from the warehouses of the enterprise's supply department.
The supply service at large enterprises may include an external cooperation department that provides components and semi-finished products from suppliers. These departments can be built on the basis of a product or functional characteristic.
Where does the purchasing department get suppliers?
Catalogs and price lists;
Internet;
Trade magazines;
Fairs and exhibitions;
Financial institutions of official bodies, banks;
Trade directories;
Trades and auctions;
Trade missions;
Own research;
Competitors of potential suppliers;
Personal contacts, correspondence with possible suppliers;
Specialized news agencies, research organizations;
Trade associations;
Companies House, government departments, licensing services, tax authorities and other bodies that have public information.
Procurement can bring significant benefits
on a competition basis
If you suspect supply service specialists of kickbacks, you need to instruct employees from another service to conduct a blitz audit of procurement conditions. In particular, comparing your purchase prices with public ones, requesting proposals for the main purchased goods on behalf of a fictitious company (or from another company, if the person being checked does not know the relationship of the enterprises). With such communication, it will be possible to determine the supplier’s real prices and understand his methods of lobbying his interests in purchasing companies.
Establish cooperation between departments. The purchasing department needs to control information on the market, informing the production department (sales department in a trading company) about the emergence of new products with better consumer value, properties offered by suppliers. Suppliers will receive data from suppliers about new products and technologies, bringing new opportunities to their work companies.
In the article “Improving production management - from combating the dangers of the crisis to realizing new opportunities”*, the lack of necessary materials, components or equipment was considered as one of the significant problems that threaten to disrupt production plans. In this publication, Alexey Kislov 1C proposes a plan of specific actions for organizing material supply processes in order to reduce costs and minimize the number of cases of lack of material when it is needed.
Note:
* article "Improving production management - from combating the dangers of the crisis to realizing new opportunities
In an unstable economic situation at manufacturing enterprises, risks associated with possible changes in working conditions with suppliers of materials and raw materials increase.
Important anti-crisis tasks in the material supply area are:
- reduction of costs for maintaining warehouse stocks;
- flexible work with suppliers on favorable terms;
- organizing the supply of materials and other components after the fact - just in time;
- maintaining accurate records of the availability of purchased components and their storage locations
Often, the warehouse contains a clearly excessive number of purchased units of material and components, this is due to the desire to have a certain safety stock, which is usually not calculated analytically, the reasons may also be in minimum supply quantities, inconsistent work of the logistics service, production and sales department. At the same time, when a specific product item is urgently required, it may not be available in the required quantity, emergency purchasing occurs at inflated prices, production deadlines are missed and there is a threat of loss of not only current profits, but also future ones - in the form of refusal of further orders, loss of customers , which is unacceptable in a crisis.
To solve the tasks, you can formulate a plan of specific actions:
3. Organizing price control of suppliers, working with suppliers on competitive principles
1. Development of an order management system, segmentation of items by type of order management
The general range of purchased components and materials can be divided into two groups according to the type of order management: according to production needs, according to the value of the order point. Using flexible planning mechanisms provided by 1C Manufacturing Enterprise Management 8, you can reduce resource costs for creating a reliable delivery plan. We analyze the frequency of consumption of materials; for frequently used materials, it is optimal to set the type of control at the order point.
1C Manufacturing Enterprise Management 8 (1C UPP) allows you to specify specific values for the order point and safety stock for each item:
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By setting these values, we solve the problems of including similar materials and components in the operational order, reduce the risks of their absence in case of urgent need for use, while stock levels are always under control.
2. Formation of reliable plans for the purchase of materials and components related to real production plans
The procurement management subsystem, part of the complex application solution 1C Manufacturing Enterprise Management, provides ample opportunities for drawing up procurement plans for any period, with varying degrees of detail, and also monitors the execution of these plans.
The concept of procurement planning, implemented in 1C UPP, can be represented as the following diagram:
The master plan can be drawn up in quantitative and/or cost terms with varying degrees of detail - by product and its characteristics or by product groups, as well as with different frequencies. Additional planning capabilities include detailing by department and project.
The 1C Manufacturing Enterprise Management 8 system provides a mechanism for automatically generating procurement plans based on actual data, which include:
- customer orders and internal orders;
- volumes of purchases and sales for the same period;
- sales plans;
- stock balance.
To compare different versions of plans, as well as to monitor their execution, special plan-fact analysis reports are provided:
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Using this toolkit, we are able to quickly model the required procurement plan based on predicted delivery conditions and the availability of production orders. We obtain the actually required volumes for a specific production program, without guessing on coffee grounds and without quantitative surplus.
3. Organization of price control of suppliers, work on competitive principles
The dynamically changing economic situation during the crisis forces the management of manufacturing enterprises to constantly monitor the prices of suppliers and competitors. The pricing mechanism implemented in 1C Manufacturing Enterprise Management 8 will allow you not only to store and update supplier price lists, but also to conduct a comparative analysis of prices for the same products.
Thus, without labor-intensive operations, it is possible to make a decision on the distribution of orders for the supply of items according to the most advantageous offers from suppliers.
4. Ensuring deliveries on time
Having formed master plans and selected optimal suppliers, you need to obtain calendar plan deliveries, thereby ensuring maximum rhythm of production without increasing warehouse stocks.
Master plans are specified using the operational procurement planning mechanism, which will allow the logistics service to plan deliveries accurate to the day and specific conditions. When automatically generating orders for suppliers, the system allows you to take into account the sources and schedules of requirements for raw materials and supplies. Thus, risks and costs are minimized for the range of supplied materials and components, which have the type of order management according to demand.
And also take into account materials in reserve, the liquidity of warehouse stocks, and generate various analytical statements.
Thus, using the tools described in paragraphs 1-4, it is possible to solve the problems of minimizing costs in the field of material supply within the framework of the company’s general anti-crisis policy, and to minimize the risks of material not being available in the warehouse at the time of its need.
The logistics department is a department whose activities are aimed at providing the necessary resources for production. Moreover, this activity must be carried out from the very beginning from the emergence of such a need for resources to their use during the manufacture of products.
Definition of Key Terms
The supply department operates within the framework of the commercial activities of a business entity, which involves the implementation of various trade operations related to the acquisition of necessary resources and the sale of manufactured products. The optimal organization of this is to some extent determined by the level of use of funds in production, the growth of labor productivity, the reduction of production costs, and the increase in profitability and profit of the enterprise. The material supply department plays the same role in production management.
The main goal of this division is to bring specific resources to production participants in the required quantity and volume, on time and at minimal cost.
The supply department has a targeted nature, which is determined by its focus and the purpose of ensuring the functioning of the production enterprise. First of all, we are talking about the needs of various consumers of products, services or work of a given business entity.
Purchasing department: its role and significance
Its role and significance are as follows:
The activity of this division precedes production and not only serves to support the process, but also independently creates, in a certain sense, its price and;
Determines and shapes both the economic results of the business entity and the needs for resources and finished products of the consumers themselves;
Designation of financial results of a manufacturing enterprise;
As a type of activity of an enterprise, it serves as the main source of its competitiveness.
The significant share of material costs in total costs (about 60%) also confirms the significant importance of material and technical supplies.
Main tasks and functions of the supply department
1. Ensuring and subsequently maintaining an optimal level of resource reserves, which will help minimize the costs associated with their procurement.
2. Ensuring accurate, prompt, comprehensive and fairly reliable delivery of resources to consumers (sometimes even to the workplace).
The procurement department performs the following functions: commercial and technological, as well as auxiliary and basic. The main functions include the acquisition of resources, and the auxiliary functions include marketing and legal support.
Supplier categories
In modern large companies, supply department employees are divided into several categories. This is due to the constant growth of volumes at enterprises, which entails a separation of the functions of planning, supply and storage of goods. With this structure, each division performs its own functions and has a specific direction. Coordination of work within these structural units is carried out by supplies.
Supply system structure
As part of this organization of work, each individual department must be responsible for a certain group of goods with full control over the supply of resources and their storage in warehouses.
It should be noted that the structure of the supply system is the main tool for achieving the goals of any business entity operating, for example, in the field of trade. Therefore, close attention must be paid to the process of structuring the logistics department.
The procurement department is also known by another name - the “purchasing department”. This division is formed depending on the number of suppliers and the range of imported goods. Product turnover must also be taken into account. Often in companies in such departments there are over ten suppliers per employee. Basically, areas of work are assigned depending on the types of goods or product groups. Ordinary employees monitor the supply of goods, timely payment for their delivery, and also plan subsequent purchases. supply controls the implementation of approved ones, monitors the turnover of goods, monitors the work of managers and, of course, provides general management. His responsibilities include ensuring continuity and planned delivery.
The operation of any enterprise depends on the availability of raw materials, goods and services supplied to it by other organizations. Even the smallest office requires space, heat, light, communications and office equipment, furniture and various other items to perform its functions. No organization, enterprise, or institution is self-sufficient.
Purchasing management is the area of activity through which a firm acquires needed goods and services. The purchasing process is the organized acquisition of products for further processing or resale. Products purchased for industrial enterprises are mainly material resources necessary for production, and for trading companies– finished products for subsequent sale.
Activities for organizing and managing procurement are aimed at meeting the needs of the enterprise for raw materials, supplies, goods and services. The task of the enterprise supply service is to organize the company’s receipt of the necessary quality and quantity of raw materials, materials, goods and services at the right time, in the right place, from a reliable supplier who fulfills its obligations in a timely manner, with good service (both before and after the sale ) and at a favorable price.
Activities for organizing and managing procurement can be considered in two aspects - operational And strategic.
Operational supply– regular operations aimed at avoiding shortages, lack of material resources or finished products. The absence of a product of the required quantity and quality, its untimely delivery can create a problem for the end consumer of the product or service and lead to increased costs.
Strategic side of supply– the actual procurement management process itself, interaction with external suppliers in accordance with the needs and requests of the end consumer, planning and development of purchasing schemes and methods. The concept of supply management refers to planning and control over all incoming material flow (material resources and finished products) entering the company.
The supply of the enterprise includes the following activities:
Planning the receipt of material resources and (or) finished products;
Establishing business relations with suppliers;
Delivery organization;
Delivery monitoring;
Acceptance and quality control;
Disposal of unclaimed or low-quality leftovers.
The scope of activity related to procurement includes all functions the performance of which is necessary for the continuous provision of the company. Therefore, the activities of a purchasing manager include solving the following tasks:
Determining the need for material resources;
Search for a potential supplier;
Assessing the possibility of purchasing from several alternative sources;
Selecting a procurement method;
Establishing an acceptable price and delivery conditions;
Delivery monitoring;
Evaluation of the supplier's products and the quality of the supplier's services.
If the supply functions are expanded, then they will include inventory control, transportation, and acceptance of purchased products.
Determining the procurement method
The organization of the supply process includes:
· creation of process infrastructure;
· Creation organizational structure supply management.
Let's look at each of these components.
1. The supply infrastructure includes divisions of warehouse and transport facilities.
2. The basis for determining the organizational structure of supply management should be the principles that provide all the functions of managing a set of departments. This is, first of all, low-level management, flexibility, efficient system communications, the principle of unity of command and a clear delineation of functions.
There are 2 main options for organizing supply, which fundamentally differ from each other in their ability to implement a systematic approach to managing material flows in the process of providing the enterprise with raw materials:
· centralized;
· decentralized.
How exactly supply is organized depends on the type and size of the organization. In a small organization, one employee may be responsible for all purchasing. A medium-sized organization may have a department staffed by purchasing staff, freight forwarders, warehouse workers, etc. IN large organization procurement may involve hundreds of people coordinating huge purchases of materials.
If an organization approaches the procurement process from a decentralized position, then department employees will independently carry out procurement, each for their own department (Appendix 1).
Advantages of this approach:
1. the user knows the department's needs better than anyone else;
2. the ability to more quickly satisfy the need for material resources.
Disadvantages of decentralized procurement:
1. while solving operational issues, employees may not notice trends in changes in the planning of the organization as a whole;
2. insufficient professionalism of employees and problems in determining supply opportunities;
3. No department can be large enough to carry out functional analysis in areas such as customs, transport services, warehousing, inventory management, purchasing analysis, etc.
As you can see, the tasks “what to buy” and “how much to purchase” are decided by the service provision directorate. Work on storing purchased items of labor is also carried out here.
The tasks of “who to purchase from” and “under what conditions to purchase” are resolved by the procurement directorate. The above supply work is also carried out here, i.e. contracts are concluded and their implementation is monitored. As a result, the function of managing material flow in the process of supplying an enterprise with raw materials is divided between various services and its effective implementation is difficult.
To carry out centralized purchasing, one procurement department is usually organized, concentrating all supply functions of the organization, which allows obtaining certain benefits:
1. consolidation of all purchases of similar or similar materials, which makes it possible to receive discounts for large orders;
2. coordination of related activities to reduce transportation, storage and maintenance costs;
3. eliminating duplication of operations and unnecessary techniques;
4. having a single point of contact with suppliers and providing them with the necessary information and services;
5. concentration of responsibility for supply, which facilitates the implementation of management control (Appendix 2).
6. This option involves the concentration of all supply functions in one hand. This structure creates ample opportunities for logistical optimization of material flow at the stage of procurement of labor items.
In order to properly organize the supply process at an enterprise, it is necessary to know supply planning methods, from which you can select a specific method or group of methods for implementation in the enterprise and effective use in the future.
Methods of supply planning at an enterprise include the following main systems: MRP I, MRP II, JIT, CIM, ERP, etc.
MRP I (“Material Requirements Planning”) is a system consisting of a series of logistically related procedures, rules and requirements, synchronized in time for each unit of components required to meet the production schedule.
The goals of this system:
· meeting the needs for materials, components and components for production planning;
· planning production operations, delivery schedules, purchasing operations.
The MRP I system begins its work by determining how many final products need to be produced and in what time frame. The system then determines the timing and required quantities of material resources to meet the needs of the production schedule.
At the output, the system provides a set of documents, including schemes for the delivery of material resources by department, volumes and delivery times. Thus, MRP I is planned to “push” material resources across departments.
MRP II (“Manufacturing Resource Planning”) is a closed-loop system related to detailed production planning, financial planning of materials and production costs, and production progress modeling. This system differs from MRP I in the flexibility of planning, providing better organization of supplies and better response to changes in demand. An important place in MRP II is occupied by demand forecasting, order placement and inventory management blocks.
As a result of using this system, material resources in the warehouse are reduced, problems of optimizing material flows and other positive effects are solved.
JIT (just-in-time concept) is characterized by minimal inventories, short supply chains, and purchasing relationships with a small number of reliable suppliers and carriers.
CIM (the concept of “computerized integrated production”) - involves the integration of all subsystems of the management system (supply management, design and production preparation, transport and warehouse systems, etc.)
ERP (Enterprise Resource Planning) - includes advanced planning and scheduling, final resource planning, product data management, etc. the main task ERP systems - achieve optimization (in terms of time and resources) of the listed processes.
When the form of organization and supply planning is formed and selected, the management of the enterprise decides on the choice of procurement method.
The choice of procurement method depends on:
· on the complexity of the final product;
· on the composition of components and materials.
You can consider the most commonly used methods.
1. Purchase of goods in one batch. The method involves supplying goods in large quantities at a time (bulk purchases).
Its advantages: ease of paperwork, guaranteed delivery of the entire batch, increased trade discounts.
Disadvantages: large need for warehouse space, slower capital turnover.
2. Regular purchases in small quantities. In this case, the buyer orders the required quantity of goods, which is supplied to him in batches over a certain period.
The advantages are as follows: capital turnover accelerates, since goods are paid for as individual shipments are received; savings on storage space are achieved; The costs of documenting the delivery are reduced, since only an order is placed for the entire supply.
Disadvantages: likelihood of ordering excess quantities; the need to pay for the entire quantity specified in the order.
3. Daily (monthly) purchases according to quotation sheets. This purchasing method is widely used where cheap and quickly used goods are purchased. Quotation statements are compiled daily (monthly) and include the following information:
· full list goods;
· quantity of goods in stock;
· required quantity of goods.
Advantages: acceleration of capital turnover; reduction of warehousing and storage costs; timeliness of deliveries.
4. Receiving goods as needed. This method is similar to regular delivery of goods, but has the following features:
· the quantity is not set, but determined approximately;
· suppliers contact the buyer before completing each order;
· only the quantity of goods delivered is paid for;
· upon expiration of the contract, the customer is not obliged to accept and pay for goods that have yet to be delivered.
Advantages: no firm commitment to purchase a certain quantity; acceleration of capital turnover; minimum paperwork.
5. Purchase of goods with immediate delivery. The scope of application of this method is the purchase of infrequently used goods when it is impossible to obtain them as needed. Goods are ordered when they are needed and shipped from suppliers' warehouses.
The disadvantage of this method? in increasing costs associated with the need for detailed documentation for each order, fragmentation of orders and multiple suppliers.
Organization and planning of supplies, as well as the choice of procurement method are not possible without the accompanying information support procurement activities of the enterprise.