Comprehensive Direct Material Procurement Framework PPT

This PPT slide, part of the 49-slide Best Practices in Direct Material Procurement PowerPoint presentation, outlines a comprehensive procurement process for direct materials, emphasizing its significance across both product development and production phases. It is structured into 6 key stages: Procurement Strategy Design, Supplier Selection, Material Specification, Forecasting, Procurement, and Fulfillment, along with Supplier Development.

In the Procurement Strategy Design phase, the focus is on identifying innovative materials and technologies, quantifying total cost of ownership (TCO), surveying supply markets, and making sourcing decisions. This foundational step sets the tone for the entire procurement process.

Supplier Selection follows, where organizations establish an awarding strategy, identify and assess potential suppliers, and negotiate contracts. This stage is crucial for ensuring that the right suppliers are chosen to meet the company's needs.

Material Specification involves collaborative efforts to design and develop new products. It includes specifying material requirements and managing any changes to those specifications, ensuring alignment between product design and supplier capabilities.

Forecasting is about determining long-term demand and communicating that to suppliers. It includes tracking incoming orders and estimating short- to mid-term demand, which is vital for maintaining supply chain efficiency.

The Procurement phase focuses on tracking inventory levels, planning procurement activities, and performing ongoing analysis of price trends. This stage culminates in placing orders or call-offs, ensuring that materials are available when needed.

Fulfillment tracks order status and manages transportation logistics. It also involves testing products and initiating payments, ensuring that the procurement process flows smoothly.

Finally, Supplier Development is about continuously measuring supplier performance, focusing on those needing improvement, and updating suppliers on the latest developments within the buyer's company. This holistic approach ensures that the procurement process is not only efficient, but also adaptable to changing needs.

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