You have been hired as a new procurement and supply manager at a company that ma

Question

You have been hired as a new procurement and supply manager at a company that manufactures and assembles construction equipment. The management team is not satisfied with the cost to manufacture and assemble the construction equipment as well as the high number of defects at assembly.

•What are the important elements that must be considered in launching a "continuous improvement" project to reduce defects and minimize cost?

•What are the important elements of standardizing purchased materials that must be considered?

Explanation / Answer

Elements of “continuous process improvement”:

Success of the continues process improvement depends on many things. First key element of continuous process improvement is identification and definition of problem and its scope. There is no point in investing numerous resources if organization is not clear with problem definition. Second element is involvement of senior management. Its true that continuous process improvement starts from factory or ground level but sponsorship from senior management is necessary for providing guidance and direction to the team. Third element is waste reduction from system. Waste define as anything that a customer is not willing to pay for. Employees must be able to identify and eliminate the different forms of waste. Some of the most common forms of waste are: waiting time, unnecessary movement, excess inventory, defects, over-processing and over-production.

Elements of standardizing purchased materials:

The main benefit of standardization is that it makes easier to place purchase orders and ensures that we procure same high quality material by executing tasks in a same consistent manner across the organization. The key element for standardizing purchased materials is to standardize processes across the entire purchasing operation. Another element is to use information technology and electronic systems to facilitate e-procurement which include but not limited to online purchase order processing, e-tendering, electronic data exchange, order tracking, delivery coordination, supplier relation management software etc.

I hope this will help. Good luck.

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