Improving a Material Purchasing Process for the Case Company
Lahti, Mikko (2016)
Metropolia Ammattikorkeakoulu
2016
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016061112734
https://urn.fi/URN:NBN:fi:amk-2016061112734
Tiivistelmä
This Master’s Thesis includes a real life business challenge of improving a process for a case company. This study was done to improve the case company’s material purchasing process by introducing a pull system. The unit in this case study is designing and manufacturing low and medium voltage frequency converters. The unit is having challenges with their current material purchasing process, which is highly dependent on sales forecast. Errors in the forecast are causing material shortages and excess inventory.
The study started by identifying the business challenge. In the current state analysis the strengths and weaknesses of the current process were identified by studying the company’s current process descriptions and by workshops with relevant stakeholders. The current state analysis indicated that the current process is too dependent on the sales forecasts and that the changes in demand are difficult to handle. Based on these weaknesses, best practice from the literature was studied to identify suitable purchasing processes that can be executed efficiently based on the real customer demand.
Based on the findings from the best practice and conversations with stakeholders a proposal for the improved material purchasing process was developed. The outcome of this study is an improved material purchasing process, which is based on the reorder point system. The process enables the case company to order materials based on the real demand and automatically from their ERP system.
This study was validated internally and considered as a good basis for more concrete testing and subsequent implementation.
The study started by identifying the business challenge. In the current state analysis the strengths and weaknesses of the current process were identified by studying the company’s current process descriptions and by workshops with relevant stakeholders. The current state analysis indicated that the current process is too dependent on the sales forecasts and that the changes in demand are difficult to handle. Based on these weaknesses, best practice from the literature was studied to identify suitable purchasing processes that can be executed efficiently based on the real customer demand.
Based on the findings from the best practice and conversations with stakeholders a proposal for the improved material purchasing process was developed. The outcome of this study is an improved material purchasing process, which is based on the reorder point system. The process enables the case company to order materials based on the real demand and automatically from their ERP system.
This study was validated internally and considered as a good basis for more concrete testing and subsequent implementation.