UNIVERSITY OF MISKOLC INSTITUTE OF LOGISTICS

„Procurement”
3. topic

Dr. György Kovács

associate professor
tel.: 20-26 ext.
e-mail: altkovac@uni-miskolc.hu

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 Purchase logistics

Figure 7.
Logistics subsystems of a
manufacturing company
Production logistics

Distribution logistics
[----------------------------------------------------------------------------] 2
+ Recycling logistics
 Figure 7/a.
Purchase/Procurement Logistics

Purchase logistics

Production logistics

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Distribution logistics
[----------------------------------------------------------------------------]
+ Recycling logistics
 PURCHASE LOGISTICS

Production logistics

Supply to the technological Production scheduling

process / supermarket

Delivery of components to the Selection of the adequate

technological line or machine technological equipment

Feeding of the technological Scheduling of inter-

process or machine operational material flow

Storage of semi-finished Selection of equipment

products of material flow Figure 7/b.
Production Logistics
Feeding of the next or final tech- Determination of inter-operational
nological process or machine storage method and mode

Testing, quality, Product monitoring/

assurance, packing tracking

Order picking, unit load forma-

Scheduling of delivery Purchase logistics

tion, delivery from the production

from the production
process
Production logistics

DISTRIBUTION LOGISTICS 4
Ordering information Distribution logistics
[----------------------------------------------------------------------------]
+ Recycling logistics
PRODUCTION LOGISTICS

Distribution logistics

Product transport to the Assignment of storage

finish goods warehouse locations of finished products
in the warehouse

Inward handling Scheduling of

loading-in activities

Storage into the finish Selection of equipments applied in

goods warehouse loading-in activities

Inventory
Figure 7/c.
Order picking, packaging,
unit load formation
management Distribution Logistics

Scheduling of loading- out

and order picking
Loading of vehicles

Selection of equipments
Delivery applied in loading-out and
order picking activities
Purchase logistics

Scheduling of delivery from the

finish product store, determination
Production logistics
and scheduling of transport vehicle

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Distribution logistics
CUSTOMER [----------------------------------------------------------------------------]
+ Recycling logistics
 PURCHASE PRODUCTION DISTRIBUTION
LOGISTICS LOGISTICS LOGISTICS

Packaging Technological Packaging

materials wastes materials

Recycling logistics

Determination of recycling
modes and places

Collection Assignment of storage locations

of wastes and storage equipments

Transport Scheduling of collection and

of wastes transportation
Figure 7/d.
Recycling Logistics
Disassembly, selection and Selection of transport
classification of wastes equipments

Storage Inventory management

Delivery to
Scheduling of delivery
recycling place

Repare Reprocessing Disposal 6

 Procurement
•The term procurement refers to all purchasing
activities, as well as the monitoring of all
elements of purchase transactions.
•Procurement also includes the management
and development of relationships with
suppliers.
•In many case procurement staff must have
detailed knowledge about products.

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Purchase Logistics ensures that:
 the right products and services,
 in the right quantity,
 in the right condition,
 is delivered to the right customer,
 at the right place,
 at the right time,
 at the right cost.

Obtaining the best „total cost of ownership”(TCO)

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Products:
 raw materials,
 auxiliaries,
 components,
 semi- finished goods,
 utilities (gas, water, electricity and telephones),
 fuel (diesel, petrol and heating fuel),
 capital assets (machinery, vehicles and buildings),
IT equipment (hardware, software and support), etc.

Services:
 warehousing,
 transportation,
 value added services,
 consultancy, etc. 9
Purchase Logistics

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 Main tasks of purchasing
•planning and managing of supply;
supply

•price and cost analysis;

analysis

• supplier market research;

•selection of suppliers, evaluation of suppliers;
•documentation, contracting, accounting;
accounting
•strategical decision making relating to material
supply, formation of material supply strategies;

•resolving issues that arise after receipt of goods or services:

•late deliveries,
•incorrect items or quantities shipped,
•defective items. 11
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 Procurement objectives
•ensuring the supply of raw materials and other supplies;
•vendor-managed inventory (VMI);
•the quality of supplies;
•product specification;
•the price;
•the origin of the supplies;
•the method of supply, e.g. JIT-style deliveries;
•the mode of transport used;
•a hierarchy of importance;
•whether to make yourself or buy from a supplier.

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Procurement objectives 1.

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Procurement objectives 2.

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Procurement objectives 3.

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Procurement objectives 4.

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Procurement objectives 5.

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Procurement objectives 6.

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Procurement objectives 7.

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Procurement objectives 8.

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Procurement objectives 9.

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Procurement objectives 10.

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 Managing the suppliers

The following areas should be considered when

managing suppliers:
•who the suppliers will be;
•how many suppliers there will be;

Formation of strategical suppliers!

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 Thanks for your attention!

Location: University of Miskolc, A/5. buliding I. floor

Phone: +36 46 565-111/17-39
Fax: +36 46 563-399
E-mail: gkalt@uni-miskolc.hu
Web site: www.alt.uni-miskolc.hu

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