Purchasing & Logistics - explore the opportunities
Developments in recent years have led to the importance of
purchasing increasing significantly. To survive in an increasingly competitive
market with increasing demands for continuous improvement, it is not enough to
focus on cost reductions. Factors such as delivery time, flexibility, service,
product development and interpersonal skills are increasingly important in the
choice of supplier. Purchasing includes and affects many areas of business:
economy, negotiating, technical skills, logistics management and more. There
are always areas you can improve both the efficiency and thus your purchases
and save money for your organisation.
Logistics is being ready to lead and control the material
flows and the related resources, information and monetary flows. The goal is to
achieve the highest potential efficiency through good service and low costs, in
order to satisfy the various parties in a supply chain. There are several
different branches of logistics related to various professional groups.
Purchasing
As a buyer, you have a very central role in your organisation and must be
familiar with the purchasing process and all of its components: administrative,
legal rules, economic efficiency, the relationship with suppliers and possess
good business acumen. By taking a course in purchasing, you can learn to create
effective work in your business, everyday.
Purchasing in more detail:
Many of today's companies purchase an increasing proportion of their
final product, or service, from outside. It is therefore important for business
success that external relationships are managed properly, opportunities are
seen and risks reduced in the supply chain, increase its competitiveness.
Historically, the purchasing function has been an activity usually centralized
around knowledge about specific products or services and knowing where to source
them.
The purchasing role and its importance has changed greatly in
recent times and the strategic importance of supply management has increased,
both within the state, municipal and private sector. Purchasing now has an
important strategic role in business and understanding this important feature
has shown to have big impacts on a company's overall success. Perhaps the most
important explaining factor, and the driving force behind the recent developments,
is today's intense global competition, which in turn creates a need to work
vigorously towards value-creating networks with other organizations.
A buyer must have a broad expertise in everything from
product knowledge to the knowledge of business law; be familiar with the competition
and have knowledge of procurement and purchasing. Furthermore, a buyer must
have good knowledge of negotiation techniques and have good language skills in
their sector, both written and orally. Good knowledge of IT systems is becoming
more and more important, as procurements are increasingly being done
electronically.
Logistics
Logistics affects your company's functioning, its economy and its competitiveness.
An education in logistics at a basic level will give you an understanding of
concepts, definitions, approaches and techniques. Training in logistics at more
advanced levels will give you knowledge about how to plan and calculate the various
streams and work more strategically. We are bringing together training and
educational programs that offer everything from basic logistics training to
more advanced training niches. There are also exhibitions and seminars in the
field.
Areas of logistics:
Transport logistics
The movement of goods from A to B. The four most common modes are truck,
rail, sea and air. Sometimes you have to shift transport modes, which usually
occurs at a terminal. For this to happen as efficiently as possible there are
some solutions for the various modes, to ensure the journey is continued as
soon as possible. In some cases transport without a transhipment terminal can increase
efficiencies. This method is referred to as Merge in Transit, where the various
carriers have a common meeting point known as the interconnector.
Production Logistics
Specifically, production logistics focuses on improving flows in production
to achieve the highest possible efficiency by controlling and reducing lead
times. This often includes a number of strategies to achieve optimal
efficiency, which often involves more than one company. One of the most basic steps in production logistics is to
design an optimal batch size. Once a firm knows its optimal batch size, it
produces according to this. The goal is to always have batch sizes tailored precisely
to customers’ orders.
Ways to control the production flow can be done in different
ways. Two of the most common methods are the Pull (Suction) and the Push (Pressure)
methods. Pull systems are a cornerstone of lean production and can be designed
using Kanban systems that only
produce according to customer needs. Push system means that a company produces
as much as it does from raw materials, which gives the advantage that the
customer is more likely to get products within a specified time, but the risk
is higher for larger stocks compared to a push system. A major challenge in the
production logistics is efficiently scheduling orders from customers while maintaining
adequate capacity. If a company has a long production process, with long lead
times and long order backlog, it is naturally more difficult to meet these
demands.
Third Party / Outsourcing
When a third-party enters and performs a value-added process in between
two other parties. For example, assembly, storage, specialized transportation
and more. The is more commonly known as outsourcing.
Fourth party logistics
Where a fourth-party enters and controls the logistics strategy for an
entire supply chain in order to create maximum efficiency. To control a supply
chain is known scientifically as Supply Chain Management. In many cases it may
be difficult to have control over an entire supply chain, because the
individual company (or group) may not have sufficient information about
production and logistics. One of the largest challenges of Supply Chain
Management is in determining who should be responsible in whole or in part for the
supply chain.
Logistics and Law
The legal connection to logistics is usually about transportation, but inventory
management may also be affected by legal afterthoughts. The laws usually present
in most cases lie with the various transportation laws (both international and
national) as well as contract law and law of sale. What is special about contracts
and sales associated with logistics and transportation is that the duration of
contracts is often difficult to estimate or to define. In many cases, companies
have different standardized contracts for transportation and goods; for
example, one of these is “Incoterms”,
which are a known framework for the standard of delivery requirements related
to international shipments.
Logistics and IT
The link between IT and logistics have become increasingly important in
the context of globalization and developing IT communities. In a world where
businesses choose to locate production, warehouse and planning dispersed around
the globe, IT becomes increasingly important, both as a control and
communication facility. As such, many companies see benefits of investing in sophisticated
business systems (such as SAP or Movex) or labelling of their own products. One
advantage of a well-functioning business is the visibility of logistics
activities within and outside the company, which facilitates the planning of
production and transportation. A labelling system that attracted much attention
recently is the so-called RFID technology, which offers the opportunity to label/mark
the goods and products with a small computer chip / electronic tag that can
contain a large amount of information about the product, often allowing for a more
efficient logistics chain.
