Purchasing Information


Basic data that should be systematically collected include:

  • Purchase item number and description
  • Quantity required
  • Date item required
  • Date purchase requisition received or authorized
  • Purchase requisition or authorization number
  • Supplier(s) quoted
  • Date supplier(s) quoted
  • Date quotes required from supplier(s)
  • Supplier quote(s)
  • Supplier price discount schedule
  • Purchase order number
  • Date purchase order placed
  • Purchase price per unit
  • Quantity or percent of annual requirements purchased
  • Planned purchase price per unit
  • Supplier name
  • Supplier address
  • Supplier promise ship date
  • Supplier lead time (days or weeks for purchase item)
  • Date purchase item received
  • Quantity received
  • Purchase item accepted or rejected (unit/lot)
  • Storage location
  • Buyer
  • Work unit
  • Requested price change
  • Effective date of requested price change
  • Date price change approved
  • Ship to location

These basic transaction data are needed for purchasing decisions and management control systems, especially if these are computerized.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Deming’s 14 Obligations


Many people helped develop quality management, and some of the early ones are called the ‘quality gurus.’ Perhaps Edwards Deming was one of the best known. He did a lot to publicize TQM. But was concerned that organizations did not get the benefits they expected. To help them on the way, he compiled a list of guidelines called his ’14 obligations.’ They are:

  1. Create constancy of purpose towards product quality.
  2. Adapt the new philosophy of higher quality, refusing to accept customary levels of defects and errors.
  3. Stop depending on mass inspection, build quality into your product.
  4. Don’t award business on the basis of price only – reduce the number of of suppliers and insist on meaningful measures of quality.
  5. Develop programs for continuous improvement of your products and processes.
  6. Train all your employees.
  7. Focus supervision on helping employees to do a better job.
  8. Drive out fear by encouraging two-way communication.
  9. Break down barriers between departments and encourage problem solving through teamwork.
  10. Don’t use posters and slogans that demand improvements without saying how to achieve them.
  11. Eliminate arbitrary quotes and targets that interfere with quality.
  12. Remove barriers that stop people having pride in their work.
  13. Have programs for lifelong education, training and self-improvement.
  14. Put everyone to work on implementing these 14 points.

Deming’s 14 points are not a program that has fixed duration, but the give a new way of thinking in your organization. They are certainly not the only possible view, but they do give some useful guidelines.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, www.youtube.com/asifjmir, Line of Sight

Partnering with Customers


  1. Pick high-visibility, vocal customers as your research partners and test sites. When you succeed together, they’ll spread the word quickly to their peers and pave your way into the market.
  2. As your customer list grows, organize their names and phone numbers by product and geographic area so you can easily provide references keyed to a prospect’s interests.
  3. Gather passive (i.e., written testimonials and quotes from customers to use in your sales materials, ads, and proposals. Remember to use videos.
  4. Use active testimonials with important prospects: Ask two or three present customers to call a prospective one, rather than waiting for the prospect to call them.
  5. Use on-site testimonials. Arrange a tour of customer premises where prospects can see your products performing.
  6. Find customers willing to meet prospects on your turf to endorse you and your products.
  7. Conduct joint presentations with your customers at industry meetings. Coauthor articles to automatically share the limelight with your customers.
  8. Bring your customers together at least once a year to share ideas with each other, give you feedback, critique new product concepts, and have a good time. Invite a few key prospects—they’re likely to come away sold.
  9. Take customers to trade shows and go to theirs. The better you know each other, the more value you both receive.
  10. Treat your customer-partners as heroes. Thank them—and more. For example, feature them in your newsletter, mail them a poster-sized letter signed by all your employees, or send a dozen balloons to their offices.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Peak Versus Off Peak Operation


An important practical problem in many industries is how to deal with sharp variations between peak and off-peak demands. Telephones are more heavily used during business hours than during evenings or weekends; local transit demands are greatest in the morning and afternoon commuting hours; in the arid areas water is more intensely demanded in summer than in winter months; restaurants are busiest at regular mealtimes, and so on. For a firm facing both peak and off-peak demands for its product, the optimization problem is how to divide its efforts between the two.

Assume for simplicity that the peak and off-peak periods are equal duration. Under pure competition the firm would be a price-taker in both the peak and off-peak markets. In the peak market it would face a higher price and in the off-peak market a lower price—but, in either market, the price will be independent of the firm’s own level of output. An example might be a city served by a number of competing taxicab suppliers, daytime hours being the peak demand period and evening hours the off-peak demand period. The quoted taxicab fares do not usually vary with time of day. However, the effective price of taxicab service does vary. In peak periods taxi earn a higher effective price, since there is less “dead time” waiting for a customer. And similarly, the customers have to pay a higher effective price in peak periods, since on average they have to wait longer for taxi to become available.

In analyzing the peak/off-peak situation, it is essential to distinguish between “common costs” and “saparable costs.” Common costs are those that apply to both peak and off-peak service. On the case of taxicabs they would include the costs of providing the casbs themselves, of running the central dispatching system,, and so on. Saparable costs are those incurred in serving each specific market. For taxicabs they might include gasoline and drivers’ wages. The distinction between common and saparable costs is quite apart from the distinction between fixed and variable costs. Common costs can be fixed or variable, and the same holds for saparable costs.

The following additional assumptions are employed: 1) There are no common fixed costs at all; the marginal common costs (MCC) is a constant magnitude. 2) The separable costs include both fixed and variable elements, but the cost function is the same in either market. However the firm may want to operate at different points along the cost curves in serving the two markets. A taxicab firm, for example, may chose to put a larger number of cabs on the road during peak period.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight