Module Two: Procurement and Supply Management
Session Two – Procurement Process
Date Submitted:February 3, 2011
Table Of Contents
Part 1 – Executive SummaryPages 3-4
Part 2 - Immediate Issue with Impact AnalysisPages 5-6
Part 3 – Environmental and Root Cause AnalysisPages 6-8
Part 4 – Alternatives and/or OptionsPages 8
Part 5 – Recommendation and ImplementationPage 9-11
Part 6 – Monitor and ControlPages 11-12
Part 1 - Executive Summary
My decision, as the supply manager of the Blozis company, is to implement new processes and procedures in the supply department. One of the changes to be made in the processes and procedures will include having the expediter’s role primarily limited to the expedition of materials. An expediter is the person in charge of scheduling purchases, purchasing and scheduling the delivery of materials and services, as well as checking orders and speeding up the arrival of materials needed to meet production schedules. The current expediter, besides undertaking these responsibilities, is also taking on a number of other responsibilities that are taking away from his abilities to properly complete his core job responsibilities.
In addition, the process for the receiving of products and materials will be improved so that items received into inventory are properly accounted for, as well as properly accounted for once they leave inventory, so that they are charged to the correct departmental budget and are paid for in a timely manner so that early payment discounts are taken advantage of. A current and accurate inventory is necessary in order to properly manage the supply department.
In regards to approval of requisitions, despite the fact the president likes to operate “informally” it is important to ensure that the required signatures are obtained on all requisitions as this helps to hold people accountable for their purchases and to control costs and remain within budget. Even though purchases over $10,000.00 may have technically been approved by the president in the budget, they are not realized purchases and in order to ensure they do fall within budget requirements, the president still should be required to execute these requisitions. As well to ensure managers are informed and can be held accountable to what items are charged to their departments, it is prudent to include on the requisition the signature of the manager of the department for which the purchase is being made.
Finally the engineering department should be required to be as detailed and accurate in their descriptions and specifications on all purchase orders. While the current expeditor has some technical background, all purchase orders should be supplied to the supply department with detailed specifications to ensure the correct materials and parts are purchased and supplied. Even though the main responsibility for this should still fall to the engineering department, there is no reason why the continued process of discussing the details of purchase orders with the expeditor could not continue as well, as this will ensure greater accuracy in the specifications detailed on their purchase orders together with greater accuracy in the fulfillment of the purchase orders.
Part 2 - Immediate Issue with Impact Analysis
Besides expediting parts and materials throughout the company, the expeditor was also writing purchase requisitions and purchase orders. At times the expeditor would just pick up parts and advise suppliers that they would receive “confirming orders” that never followed. This resulted in the supply department at times receiving invoices for items that could not be matched to a corresponding purchase order. In order to control costs, remain within budget and to ensure accurate inventory and purchases, this process cannot continue. The Blozis Company needs to have their...