Purchasing, Supply Chain Management

Purchasing supply chain management software is challenging as just like the supply chain, it includes a number of moving parts, departments and changing regions. When you migrate to a new software platform, all your stakeholders are affected. Why do we buy software in the first place? The purchasing decision is not really about the software itself. It’s about the issue that the software will solve, or at least, you hope it will solve.  In the context of a complex supply chain, here are some common goals which those in the position to purchase software wish to achieve:

 

  • Increased efficiency through the automation of a pre-existing manual business process
  • Offer new functionality, helping you do more or increase your organization’s quality of service
  • Compliment current software platform, so that well-functioning pre-existing systems can live-on
  • Futureproofing, ensuring the software spend down the line is minimized

 

Traditional supply chain ERP software is corporate organization outward focussed with a high emphasis on stakeholder integration and collaboration. You need to consider a product that will not only integrate into your organization’s business processes, but also those of your suppliers, vendors and other partners which you interact with on a regular basis. Some important considerations for a potential ERP implementation include:

 

  • How employees within your organization will use the software
  • How they do those activities and processes today
  • How your partners including vendors and logistics service providers interact with you today and if it will change their process. Will they have the desire to / do they possess the ability to interact with the software you are looking to procure.

 

Some organizations look at purchasing software from a procurement perspective. Their procurement teams might create an RFP and will have particular requirements. They will research potential providers and consult with different departments in a cross functional approach. Ultimately, a document will be created, outlining what they are looking for in a vendor, potentially in the form of a balanced scorecard. From there they will shop around for that software.

 

Another option is for the supply chain organization within the company to own the software purchasing decision. The organization is familiar with how they get products from purchasing to logistics to customer service to planning: all of those departments will be considered in some way. This organizational focus is in a better position to represent the specific needs of the various business functions. While the procurement approach is often more concerned with making the most feasible financial decision. Of course, the best approach to a major supply chain software procurement decision would be a combination of the two methodologies.

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Inventory Management, Purchasing

          Bankruptcy forced the DeLorean Motor Company (DMC) to shut down its Belfast, Northern Ireland production facility in 1982, with an inventory of over 1,700 brand new cars and millions of parts. During liquidation, Consolidated International acquired all of DMC’s remaining inventory. Meanwhile, Steven Wynne, a British mechanic specializing in DeLorean maintenance and restoration since 1982, opened a 40,000 square foot warehouse in Houston, Texas, meant to act as a centralized distribution centre for used DMC parts. In 1997, Wynne acquired all DMC inventory from Consolidated International, in addition to the DeLorean Motor Company name and logo.

          Initially, the acquisition was aimed to support Wayne’s maintenance, restoration and parts sales operations. He and his team have serviced a consistent stock of 35-45 DeLoreans belonging to owners from all around the world since 1987. They also sell parts to DeLorean owners and restorers. As those operations were still not considerably cutting into the new DMC’s parts stock, they began assembling brand new DeLoreans themselves.


         A DeLorean requires roughly 2,700 individual parts of which DMC has over 99%, with no opportunities for traditional inventory replenishment. To fill the holes in their inventory, the remaining less than 1% are rather easily reproduced, rebuilt or procured as used parts. As all original DMC technical specifications and drawings were also acquired, they are often able to reproduce parts using the original specs with CAD/CAM and 3D modeling. This, in combination with their current inventory, allows the modern DeLorean Motor Company to produce a maximum of 500 cars, while continuing its additional pursuit to be the most prominent facility for DeLorean service, parts and restoration.


     

        Since 2016, the new DMC has employed Acctivate as its inventory management software. Acctivate is utilized for inventory adjustments when parts are received in the distribution centre, whether reproduced or acquired as used parts. Those adjustments are then automatically integrated into DMC’s web store. Acctivate supports and is used to create assemblies (one part containing multiple parts) in addition to sales order management including open and closed sales order monitoring, the creation of pick tickets and sales order printing. Some service orders, such as full frame-off restorations, require 200-300 line items for labor codes and part codes.

We’re able to build a service order pretty quickly with Acctivate, especially with some of these big restorations– Sarah Heasty, Service Manager, DeLorean Motor Company.

         DMC uses Acctivate’s Business Activity Service Billing module to create service order quotes, where separate subtotals can be created for a customer’s engine, transmission, suspension, etc., providing increased transparency. The Business Activity Scheduling module is employed to track labour hours and parts used for each service order. Labour hour tracking helps with DMC’s capacity planning as parts are pulled prior to service, increasing efficiency.

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