L_SMS L-Supply systems management

Supply chains in organizational structure of the enterprise and processes.

Testing-chapt.1-6

Key words:

Procurement logistics, supplying, border elements, procurement market, supplier

Chapter objectives:

  • Understanding the role of procurement logistics and supplying,
  • To deepen the understanding the links between functions of corporate departments and corporate structures,
  • Understanding the importance of logistics for enterprise profitability.

Time required to study the chapter: 8 hours

Interpretation:

Realization of the value-creating process in the subject of production character
The content of logistics in a modern concept is to provide comprehensively the material and integrated information flows from suppliers to enterprises and by enterprise to customers. An enterprise, like a target behavior system, cooperates with its surroundings. The main input-side links include processes of supplying raw materials, semi-finished products and final products. Output side activities include operations related to the realization of products or services on the market. The purchase function consists in providing input processes in the supply chain on a commercial basis, while procurement logistics ensures the input processes to the enterprise in the whole range of integrated material and information flows.
The task of procurement logistics is to plan and ensure the necessary material inputs with the optimal economy.
 
Logistics management ensures:
in the purchase field:
  • market survey,
  • finding and selection of optimal resources,
  • negotiating and concluding contracts,
  • price and value analysis,
  • purchase management.
in the supply field:
  • acceptance and inspection of goods,
  • storage and warehouse management,
  • in-house traffic and handling,
  • planning, managing and controlling integrated flows of materials and information.
 
Stages of the purchase process is created by:
  1. specification of the enterprise's needs,
  2. determination of product types and its quality,
  3. detailed needs specification,
  4. identification of suppliers,
  5. offers analysis,
  6. supplier selection and pricing,
  7. an order issue and economic contract conclusion,
  8. continuous monitoring of suppliers and their evaluation.
 
System of variants evaluation and business partners selection
As part of the procurement process, the relevant component is the process of potential suppliers selection who are capable to provide demanded commodities or services under the given conditions. When selecting a supplier, it is recommended to put particular emphasis on following criteria:
  • supplier solvency,
  • the level of management of its production process and possibilities of capacities expansion,
  • guarantee of goods and deliveries quality,
  • delivery times and their reliability,
  • meeting the packaging requirements,
  • the rate of possible defective deliveries exchange,
  • flexibility within supplier-customer relationships.
The general criteria for evaluating or comparing products include utility value and procurement costs. This can be expressed by the so-called relative effective value.
From the economic point of view, the variant having the smallest costs (while maintaining the other parameters) will be most advantageous.

Study materials:

Basic literature:
JEŘÁBEK, Karel. Logistika: study support for combined study. 1. ed. České Budějovice: Institute of Technology and Business in České Budějovice, 2012. 96p. ISBN 978-80-7468-016-8.
MACUROVÁ, L. et. Logistika. A collection of examples. Study materials for part-time study. Zlin, Tomas Bata University, 2008. ISBN 978-80-3718-745-3.

Recommended study materials:
SCHULTE, CH.: Logistika. Prague, Victoria publishing, 1994. ISBN 80-85605-87-2.


Questions and tasks

  1. The content of logistics in a modern conception includes:
    1. market survey
    2. finding and selecting optimal resources
    3. to provide comprehensively the material and integrated information flows from suppliers to enterprises and by enterprise to customers
  2. Procurement logistics ensures:
    1. supplier solvency
    2. the input processes to the enterprise in the whole range of integrated material and information flows
    3. input processes in the supply chain on a business side
  3. The task of procurement logistics is:
    1. to plan and ensure the necessary material inputs with the optimal economy
    2. to provide a relative effective value
    3. supplier selection and pricing
  4. Logistics management in the supply field does not provide:
    1. acceptance and inspection of good
    2. relative effective value
    3. planning, managing and controlling integrated flows of materials and information
  5. When selecting a supplier, it is recommended to put particular emphasis on some criteria. They do not include:
    1. supplier solvency
    2. delivery times and their reliability
    3. storage and warehouse management

Key to solve the questions:

  1. c
  2. b
  3. a
  4. b
  5. c
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