4.Logistic cycle and modern purchasing methods. Prospective in purchasing logistics

Modern tendencies in competition: shift from competition among enterprises to rivalry between separate logistic cycles (chains).

Accelerated formation of logistic purchasing (supplying) chains to acquire synergy effects has been favored by: informatization development, globalization, individualization of production, ecological factors. Other sciences (marketing, personnel administration, finance, etc) have been effected by the same factors as well.

Deepening specialization and purchasing logistic: result – increasing share of surplus value (добавочная стоимость) created by the suppliers. Ex.: automobile plant produces in average up to 40% of car value, while the suppliers altogether more than a half.

Purchasing (supplying) systems - two possible scenarios:

1. “Outsourcing”> shift, replacement of some production process to the third enterprises, making prod-n costs as less as possible (“lean production”). Producing by itself – only components being essential to the main production, and buying those which are cheaper on external market.

2. “Insourcing”> contrary to the previous, concentrating prod-n in one place or as close as possible. Reducing dependence (risk) from the suppliers, transport-n costs.

Combination of two scenarios may result in:

“Single sourcing”: to simplify the purchasing, reduce costs, increase of transparency; concentration of supplying sources into single one; common features with “JIT”, mutual investments and dependency – increasing synergy effects. Disadv: high risk if only one supply source and possible associated failures.

“Modular sourcing”: buying of previously concentrated (“assembled”) modules of input materials from the “system” suppliers.

“Regional sourcing”: “territorial” scale of supplying system, as distinct from “commodity” scale of modular sourcing.

Informatization: modern technology of decision making in logistics, the tool to manage the resources flows in the real-time operation mode.

System of automatic identification: AI

System of electronic data exchange: EDI

Ecological factors: mega-tendency, directly influences logistic systems. The renovation and creation of logistic chains have to include the recycling processes (technology), improvement of packaging methods, optimization of transportation infrastructure-usage (shift to ecologically safe methods of delivery), etc.

SCM (supply chain management) – incl. all the aspects of products deliveries to the clients; business philosophy, built on integration processes.

SM (supply, purchasing management) – incl. relations of “buyer-supplier”.

Goals of an organization (main categories):

1. survival (initial need); 2. growth: new markets, market shares; 3. financial: budget, profitability of investments, etc.; 4. interactions with ext. environment

Typical purchasing (supply) goals:

1. Quality. 2. Delivery. 3. Price. 4. Quantity.5. Services.

Prospective in purchasing/supply logistics (main tendencies):

1. Accent on quality aspect and customer satisfaction; 2. Accent on purchasing process, not on the fact of a bargain; 3. Purchase of services, not only products; 4. Purchasing – on contractual base, by third parties; 5. Technical education might be essential for a purchasing manager; 6. Electronic data exchange (EDI) with main suppliers; 7. Closer relations with the supplier; 8. Delegation of responsibilities. 9. Long-term contracts; 10.Shortening decision time-cycles; 11. Video-conferences with the suppliers; 12. Separate administration of “supply-chains”; 13. Analytical systems and artificial intelligence; 14. Internet; 15. Cost reduction technologies and competition growth; others.

The list of the named tendencies would include some other factors, and their significance to be reviewed periodically.