LEAN PURCHASING
You have made significant improvements in your operations. Are you ready to expand your lean processes into the supply base? Where do you start and how deep into the supply chain do you go? What is the process and what resources are required? Do you need e-commerce and what about software? Will suppliers play along and how do you handle the holdouts? What are the advantages and the payback? What tools do you need? What must your organization do to take advantage of these new and highly profitable activities?
We will address these questions and more in a one and a half day AME program on Lean Purchasing. Theory is backed up by on-the-job examples and real results. It is recommended that general management and finance personnel also attend this workshop.
What is Lean Purchasing and how do you integrate it into your lean enterprise? Lean Purchasing can be integrated into the current operations of the company, but it will require some internal changes including new measures of the purchasing function in order to realize the full potential and profit contribution of lean. How you define lean defines your supply chain and its results.
Identifying and quantifying the cost drivers in the supply chain. Money is hidden in inventories, time, and inappropriate quality throughout the process. You will come to understand your coping mechanism. The true cost to carry inventories will astonish the most liberal cost accountant. The price of non-conforming materials can run 7 to 15 percent of the cost to manufacture (25% in capital equipment). Cost improvements in these areas alone can increase profit margins by 20 to 30 percent. Understand and use the cost to your company of supplier lead times.
New measurements for purchasing and suppliers. Price, delivery, incoming quality, and cost reduction are the wrong measures if the company really wants improved business results. You will learn new measures that contribute directly to profit.
How to improve on-time (when you need it) deliveries by 60 percent and more. Acquire new tools that improve delivery and have nothing to do with expediting or increased inventories. How to use supplier managed deliveries. What do missed deliveries cost your company? Put a dollar value on lead time.
Measures of quality
and supplier certification will change. You will learn the tools needed to
assure that purchased material quality will meet your needs in the future and
at significantly lower costs. Our eight-point approach to supplier quality has
saved companies millions in execution costs and results.
Itinerary:
First day –
8:00 am Registration
8:30 am Elements of Lean Purchasing
Definition of Lean suppliers
Cost drivers within the system and locating opportunities
Manufacturing Velocity: Lean measures, opportunities
Impact of inventories
The cost of carrying inventories/cost of lead times.
Three and a half point system for evaluating suppliers and setting goals
Supplier managed inventories vs. supplier managed deliveries
Consigned inventories
Supplier quality: What are you asking for and what are you getting?
ISO vs. Baldrige vs. Shingo. Who’s got it right?
Supplier certification that works. Eight point plan that affects future quality
Lot sizing and minimum orders
What’s in a price and common practices that drive up prices
What a good price looks like (reverse pricing and affordability)
Cost accounting issues: Variance accounting and other self-inflected wounds
Compressed sourcing
The power of information
Second Day
Requirements contracts vs. blanket orders
Exercise
Use of distributors and MRO purchases
What’s a small company to do?
Software systems that don’t work/work/don’t work
Supply Chain Management – a Lean Process
Measuring purchasing – two new apporaches
Purchasing’s new role
Look at results from companies who have implemented Lean
Purchasing and their business results. One
company reduced supplier lead times by 70 percent in ninety days. Another
reduced WIP inventory by 25% while increasing throughput by 700 percent. Still
another reduced manufacturing cycle time from 60 days to 5 days and sold a
warehouse. We will show you how they did it.
10 C.P.M. hours will be
awarded to attendees.
Michael Harding has been
on AME’s Northeast region board of directors for 14
years. He has many years of purchasing management experience with Texas
Instruments, GE, RCA, TRW, and Digital Equipment. He holds degrees in law,
business, and a Masters in Purchasing. He has authored three books on
purchasing. Mr. Harding has been a purchasing and supply chain management
consultant for the past 14 years with clients in