Purchasing and Inventory Management PDF

Dr Aya Anwar Mustafa Consultant and lecturer of clinical and chemical pathology, kasr Al Aini, Cairo university Program director of MlT program, Applied Health Science, Galala University MD of clinical and chemical pathology, kasr Al Aini, Cairo university...

Dr Aya Anwar Mustafa Consultant and lecturer of clinical and chemical pathology, kasr Al Aini, Cairo university Program director of MlT program, Applied Health Science, Galala University MD of clinical and chemical pathology, kasr Al Aini, Cairo university Quality Excellence Diploma, AUC Hospital Management Diploma, AUC Purchasing and Inventory  Purchasing and Inventory Purchasing and Inventory management are crucial components of any organization's supply chain. Effective management in these areas can significantly impact an organization's profitability, customer satisfaction, and overall operational efficiency. This module will delve into the key aspects of purchasing and inventory, including supplier selection, purchasing processes, inventory control, and supplier quality management.  Supplier Selection Importance of Supplier Selection: Quality of products or services Delivery reliability Cost-effectiveness Risk mitigation Supplier Selection Criteria: Quality standards Financial stability Technical capabilities Delivery performance Environmental and social responsibility Geographic location Reputation and references  Supplier Evaluation Supplier Evaluation Methods: Supplier surveys and questionnaires Site visits Performance metrics (e.g., on-time delivery, quality defects) Supplier scorecards Purchasing and Receiving Processes Purchasing Process: Identify needs Request for quotation (RFQ) or request for proposal (RFP) Supplier selection Purchase order creation Purchase order approval Supplier delivery Goods receipt and inspection Invoice verification and payment Purchasing and Receiving Processes Receiving Process: Verify quantity and quality of goods received Inspect for damages or defects Match purchase order with delivery documents Update inventory records Coordinate with relevant departments (e.g., warehouse, production) Inventory Management and Control Inventory Management Objectives: Minimize inventory costs (holding costs, ordering costs, stockout costs) Ensure product availability Optimize inventory levels Improve forecasting accuracy Inventory Control Techniques: Economic Order Quantity (EOQ) Just-In-Time (JIT) inventory Kanban system ABC analysis Safety stock Inventory Management and Control Economic Order Quantity (EOQ) Inventory Management and Control Economic Order Quantity (EOQ) is a mathematical model used to determine the optimal quantity of inventory to order in order to minimize total inventory costs. These costs typically include ordering costs (such as administrative fees) and holding costs (such as storage and insurance). EOQ helps businesses find the right balance between placing too many orders, which increases ordering costs, and ordering too little, which increases holding costs. Inventory Management and Control Just-In-Time (JIT) inventory Inventory Management and Control Just-In-Time (JIT) inventory is a lean manufacturing method that aims to reduce waste by producing goods only as needed, rather than storing large quantities of inventory. This approach minimizes holding costs, reduces the risk of obsolescence, and frees up valuable warehouse space. Inventory Management and Control Kanban system Inventory Management and Control Kanban system is a visual system for managing work and workflow. It uses cards or digital tools to represent tasks and their progress through various stages of a process. Kanban boards are typically divided into columns like "To Do," "In Progress," and "Done." As tasks are completed, they are moved from one column to the next. Kanban emphasizes continuous flow, limiting work in progress, and visualizing workflow bottlenecks.  Inventory Management and Control ABC analysis Inventory Management and Control ABC analysis is a technique used to categorize inventory items based on their value and consumption rate. It divides items into three categories: A items: High-value items that account for a significant portion of the total inventory cost. B items: Medium-value items that are less critical than A items but still important. C items: Low-value items that have a minimal impact on the overall inventory cost. By categorizing inventory in this way, businesses can focus their management efforts on the most valuable items (A items), while implementing less rigorous controls for B and C items. This helps optimize inventory levels, reduce costs, and improve overall inventory management efficiency. Inventory Management and Control Safety stock Inventory Management and Control Safety stock is a buffer inventory held by businesses to minimize the risk of stockouts due to unexpected demand fluctuations or supply chain disruptions. It acts as a cushion to ensure that products are available to meet customer needs, even if there are unforeseen delays or increased demand. While safety stock helps prevent stockouts. Inventory Management and Control Supplier Quality Management Importance of Supplier Quality: Impact on product quality and customer satisfaction Risk mitigation Cost reduction Supplier Quality Management Activities: Supplier audits and assessments Quality agreements and contracts Quality performance monitoring Supplier corrective action and preventive action (CAPA) Supplier development and training Conclusion Any muddiest point?????