The most challenging procurement program for 2016. Designed for people who look for excellence in the procurement management

1. Procurement
Best Practice
Program
Prof. Ayman Al Akkad

2. Program Outlines
1.Overview of Procurement Facts ‫المشتريات‬–‫عامة‬ ‫نظرة‬
2.Understanding Procurement Chain ‫المشتريات‬ ‫أنشطة‬ ‫سلسلة‬ ‫مفهوم‬
3.Procurement Plan ‫المشتريات‬ ‫عمل‬ ‫خطة‬
4.Supply Positioning/ LTA ‫التو‬‫ر‬‫المواقع‬ ‫وتحديد‬ ‫يد‬-‫االجل‬ ‫طويل‬ ‫اعداد‬
5.Risk Management ‫المخاطر‬ ‫إدارة‬
6.Procurement Oversight ‫المشتريات‬ ‫على‬ ‫الرقابة‬
7.Contract Management ‫العقود‬ ‫إدارة‬
8.Engaging and Managing Consultants. ‫االستشاريين‬ ‫الخبراء‬ ‫وإدارة‬ ‫المشاركة‬
9.Transportation in a Supply Chain ‫النقل‬‫ودوره‬‫سلسلة‬ ‫في‬‫التوري‬
2

3. Registration Information
▪Location: Hadara Center, Damascus – Syria
▪Contact Details
▪Tel: 0933-726444
▪Email: prof.ayman.Akkad@gmail.com
▪Teaching Language: English + Arabic
▪Program Materials: PPTs + Ebooks (All in Enlish)
▪Certification: Final Test + Project.
3

4. Overview of
Procurement
Process
Unit One

5. Procurement: Definition
▪Is the act of acquiring, buying goods, services or
works from an external source. It is favourable that
the goods, services or works are appropriate and
that they are procured at the best possible cost to
meet the needs of the acquirer in terms of quality
and quantity, time, and location.
5

6. What exactly is procurement?
▪All stages and parties involved, directly or indirectly,
in fulfilling a customer request
▪Internally, the procurement process includes all
functions involved in fulfilling a customer request
(product development, marketing, operations,
distribution, finance, customer service).
6

7. What exactly is procurement?
▪Externally, it includes the suppliers, vendors,
manufacturers, transportation, and distributors, that
exist to transform raw materials to final products
and supply those products to customers.
7

8. Example: Buying Cereals from Wal-Mart
Tenneco
Packaging
Paper
Manufacturer
Timber
Company
P&G or other
Manufacturer
Corn
manufacturer
Wal- Mart
Plastic
Producer
Customer
8

9. The Objectives of a Procurement Chain
▪Primary purpose is satisfying customer needs.
▪Maximizing the overall value created
▪Value, measured monetarily, refers to: the difference
between what the final product is worth to the
customer (price the customer is willing to pay) and
the effort, collectively, the procurement chain
expends in filling the customer’s request (the
collective costs)
9

10. The Objectives of a Procurement Chain
▪Therefore, procurement profitability would be: the
difference between revenue generated from the
customer and the overall cost across the entire
Procurement chain.
10

11. Why should procurement be a challenging
problem?
▪Procurement chain network is often very complex
▪Procurement chain partners have conflicting
objectives.
▪Consequently, making everyone to agree is not an
easy task.
11

12. Conflicting Objectives
in the Procurement Chain
1. Purchasing wants
▪Stable volume requirements
▪Flexible delivery time
▪Little variation in mix
▪Large quantities
2. Manufacturing wants
▪Long run production
▪High quality
▪High productivity
▪Low production cost
Tell me why some of these objectives are conflicting.
12

13. Conflicting Objectives
in the Procurement Chain
3. Warehousing wants
▪Low inventory
▪Reduced transportation costs
▪Quick replenishment capability
4. Customers want
▪Short order lead time
▪High in stock
▪Enormous variety of products
▪Low prices
13

14. PROCUREMENT PROCESS IN SAP
14

15. BASICS PROCUREMENT PROCESS IN SAP
▪Materials can be procured in any company
from external vendors or from other branches
of the company itself.
▪Purchasing, warehousing and invoice
verification departments are involved in
procurement process.
15

16. Procurement Process
▪Determination of requirement (purchase requisition
– PR or Materials requirement planning MRP)
▪Determination of source of supply (Request for
quotation – RFQ)
▪Vendor selection ( Quotations – compare, accept or
reject)
▪Purchase order - Manual or automatic
16

17. Procurement Process
▪Data in purchase order either from PR or RFQ
▪Monitor and send reminder to suppliers
▪Goods Receipt
▪ Invoice verification
▪ Payment process
17

18. Organizational level
▪Client – highest hierarchical level in SAP
system
▪Company Code – Smallest organizational unit
for external reporting
▪Plant – Organizational unit within logistics for
production, procurement and MRP (Material
requirements planning)
18

19. Organizational level
▪Storage locations – Plant dependent, inventory
management and physical inventory places
▪Purchase organization – Centralized at
company level or decentralized at plant level
▪Purchase Group – Not defined in customizing,
directly deal with vendors.
19

20. Procurement Departmental Structure
▪The Department of Procurement and Contracts is
comprised of five (5) primary business units
1. Financial and Administrative Services
2. Systems Management and Technology Services
3. Strategic Planning and Procurement Policy
4. Contract Compliance and Vendor Services
5. Purchasing and Contract Administration
20

21. Departmental Responsibilities
▪Finance and Administrative Services
▪Requisition Services
▪Office Management
▪Record Management
▪Vendor Services
21

22. Departmental Responsibilities
▪Systems Management and Technology
Services
▪Purchasing Web Site
▪E-Procurement
▪Bids/RFPs for technology goods and services
22

23. Departmental Responsibilities
▪Strategic Planning and Procurement Policy
▪Procurement Policies and Procedures
▪Strategic Sourcing
▪Board Reports
▪Contract Administrators for special projects
23

24. Departmental Responsibilities
▪Contract Compliance and Vendor Services
▪M/WBE Monitoring
▪M/WBE Statistical Data
▪Vendor Performance issues
▪Vendor Report Cards
24M/WBE = Minority & Women Business Enterprise

25. Departmental Responsibilities
▪Purchasing and Contract Administration
▪Competitive Solicitations - Professional Services
▪Competitive Solicitation - Operations
(Construction)
▪Contract Management
25

26. Contract Administration
▪Solicitation Processes
▪Bids (BID)
▪Request for Proposals (RFP)
▪Request for Qualifications (RFQ)
▪Request for Information (RFI)
▪Sole Source (SS)
26