All business organizations engage in procurement from external vendors, suppliers, contractors or subcontractors. Procurement or purchasing and supply management is vital to the operations of any business firm, especially a manufacturer. But even firms engaged in service businesses need dependable sources of supply.
This is a course on how the principles of modern procurement and supply management have been applied by forward-looking and innovative organizations. The course leads to an identification of a set of strategies and best practices that have been proven to work and show great promise of improving an organization’s quality, productivity, competitiveness, and profitability levels, provided that they are correctly and consistently applied. The course describes these practices and recommends how they can be properly applied in the Philippine environment.
At the end of this course, the participants will have been able to:
- Identify the strategic issues that are embodied in the procurement of goods and services from external entities
- Compare and contrast the traditional paradigms of purchasing or procurement vs. those of MPSM
- Identify the critical actions and key success factors needed to institute a change from the traditional purchasing paradigms to those of MPSM
- The impossibility of complete vertical integration
- The upstream supply chain
- Tier 1
- Tier 2
- Tier 3
- Managing the supply chain as a major strategy
- The mission of Purchasing and Supply Management
- Procurement objectives
- Procurement and supply management strategy
- Key issues in purchasing and supply management
- Single source or dual sources vs. multiple sources
- Arms-length adversarial relationship vs. collaborative partnership
- Direct purchase vs. multi-tier supply
- Non-interference vs. supplier development
- Exclusively internal new product development vs. supplier collaboration and participation
- Large suppliers vs. SMEs
- Traditional practices in purchasing and supply management
- Purchasing or procurement is regarded as tactical or operational.
- At least three competing suppliers per item; for big purchases, competitive bidding, with the lowest bidder winning
- The relationship with suppliers is adversarial.
- All internal information is confidential and cannot be shared with the supplier.
- The relationship with the supplier is short-term.
- If a supplier falters in quality or delivery, it is threatened with cancellation of the current order, or with being cut-off from future orders.
- The purchasing department is concerned only with direct suppliers and wants these to be the manufacturers as much as possible.
- Collaboration with suppliers is strictly prohibited because of the fear of collusion and dishonesty.
- All new product development is done internally; no supplier is allowed to participate.
- Suppliers should be large and with a long track record.
- If the volume of a particular purchased item is large and expected to grow, the company should consider producing it internally.
- The practices of Quality Purchasing and Supply Management
- The buying company must practice Lean Manufacturing or Just-in-Time Production
- The primary mission of purchasing and supply management is to contribute to the firm’s competitiveness and profitability by enhancing the quality, total usage cost, delivery reliability, and service provided by the upstream supply chain members.
- Conduct firm-wide spend analysis to identify the critical few (Class A and Class B) items being purchased, as well as the cost of the purchasing function.
- Rationalize the supply base, reduce the number of suppliers per item, go for single source supply when feasible, and consolidate contracts.
- Concurrently with reducing the supply base, organize the upstream supply chain into several layers or tiers shaped like a pyramid.
- Establish long-term strategic partnerships with the best suppliers, with both sides endeavoring to nurture a relationship built on trust and mutual benefit.
- Close communication is practiced between customer and supplier; even information previously considered sensitive (e.g., costs of production) are shared with one another.
- Establish clear, specific, measurable, and time-bound standards for all suppliers, and give each of them regular (e.g., monthly) evaluation feedback on their performance.
- For suppliers that falter in meeting some standards, initiate a Supplier Development program that provides technical assistance for process improvement, an equitable sharing of savings and other benefits, and a combination of pressure and incentives to motivate the suppliers to continuously improve their performance.
- Suppliers that perform excellently, on the other hand, are recognized and honored, and prioritized for future orders, without being subjected to lowest-price bidding.
- Enter into long-term supply contracts with high-performing, reliable suppliers (e.g., blanket P.O. or system P.O.) covering several years.
- Have a reliable vendor manage inventories of high volume stock items that it supplies.
- An alternative is Third-Party Logistics, whereby a professional logistics service provider is engaged by the supplier and the customer to undertake the functions of Inventory Planning and Control and of Warehousing.
- Distributors and agents are regarded as valuable suppliers if they can provide service that will enhance product performance.
- Treat suppliers as valuable members of design and engineering teams for new product development.
- Big enterprises engage in the development of SME suppliers for strategic benefit.
- Organize partner suppliers into a “suppliers’ association” whose members practice mutual learning through benchmarking and sharing of best practices.
- The company will not produce internally what can be produced better, cheaper, and faster by specialist suppliers; it will focus on its core competencies.
Resource Speaker – Dr. Enrico Mina
Dr. Enrico C. Mina is an Associate Professor of the Ateneo de Manila University Graduate School of Business, who teaches various economics and business management courses. He has had 27 years of teaching experience, the bulk of which was at the post-graduate level at the AGSB. Dr. Mina returned three years ago from a three-year teaching engagement as Senior Lecturer at the Department of Business Studies of the Papua New Guinea University of Technology at Lae City, Morobe Province, Papua New Guinea. While there, he taught courses in basic economics and management and acted as the Director of the Executive MBA Program, which he helped conceptualize and design and in which he taught six courses.
Dr. Mina also has extensive experience in the business world as a manager, consultant, and trainer, particularly in the areas of Total Quality Management and kaizen (continuous improvement), operations and supply chain management, and strategic management.
Dr. Mina is a faculty member as well at the Ateneo School of Government, teaching Applied Economics in the Public Sector. At the same time, he teaches MBA courses at the Ateneo School of Medicine and Public Health, whose curriculum seamlessly integrates medical science and management.
He has written and published several research papers and original cases. While at PNG University of Technology, he wrote a textbook entitled Introduction to Economics for use by the university’s Department of Open and Distance Learning’s Adult Matriculation Program. He has also been the adviser of the Governance Innovation Report (equivalent to a masteral thesis) of 24 students at the Ateneo School of Government.
Dr. Mina obtained his Doctor of Business Administration (DBA) degree from De La Salle University-Manila in 2011, his MBA from the Ateneo Graduate School of Business in 1979, and two undergraduate degrees (AB major in Economics and BSBA major in Management, Summa cum Laude) from De La Salle University-Manila in 1973.
Limited slots are available. Hurry! Join us now.
Regular Rate Php 1,499.00 + VAT starting August 12, 2020
Early Bird Rate Php 1,399.00 + VAT until August 11, 2020
Group Rate Php 1,299.00 + VAT per pax for 5 or more pax
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