1. Inward
Supply Chain Management
Inward Supply Chain is most discussed phenomenon
of last decade yet it has been treated as Either Cash Expenses Decision or Free
Credit Utilization tool. In reality this has deeper integration with SME
Operations than any other function due the fact that unless input is there No
Value Addition can happen and thus we dive into the Thought Process of SCM and
in this module we will discuss each aspect of Directorial, Function, Operations
and Personal Responsibilities and Task List based on ABC3M Calendar
.
Fundamental Inward Supply Chain Efficiency Parameters
·
Perfect Order Fulfilment
·
Order Fulfilment Cycle Time
·
Upside Supply Chain Flexibility
·
Upside Supply Chain Adaptability
·
Downside Supply Chain Adaptability
·
Supply Chain Management Cost
·
Cost of Goods Sold
·
Cash-to-Cash Cycle Time
·
Return on Supply Chain Fixed Assets
·
Return on Working Capital
10 Golden rules for Effective SCM Process
1.
Organize and synchronize
around logical and complete processes rather than functions.
2.
Create a continuous flow of
the right material throughout the supply chain.
3.
Move to making product to
customer demand rather than finished goods.
4.
Eliminate non-value-added
steps throughout the supply chain.
5.
Reduce order-to-delivery lead
times to quicker than customer requirements.
6.
Mistake-proof processes to do
it right the first time and every time.
7.
Create on optimal high
velocity flow of high quality, relevant and necessary information throughout
the supply chain.
8.
Store material at the point of
use.
9.
Make your customers and
suppliers your real partners.
10.
Develop a
team-based organization, provide the necessary support and empower them
to make decision that affect their work.
Detailed Audit Parameters Based 10 Golden Rules of SCM
1.
Does Supply Chain Department have Direct
Planning Partnership with Production and Utilities Department
2.
Does it have Budgetary Control Mechanism for Own
Department Costs and Overall Cost Control
3.
Does Inward Supply Chain Department have
Communication with Finance Department for Working Capital and Liquidity
Position to establish co-ordination with Vendors for Payment Commitments
4.
Does Vendor Establishment Process get derailed
due Market Perception?
5.
Does SCM Department Maintains Alternative
sources of supply for Risk Management
6.
Does Appropriate Inventory and Consumables
Balance is maintained for uninterrupted production schedule?
7.
Does Business Cycle Effect is Monitored by SCM
for Observance of Cost-effective purchases?
8.
Does Market Pricing Trends are recorded and
predicted for Macro and Micro Economic Factors?
9.
Does BOM based Alternative Material Suggestions
are provided by SCM to PLC and Production?
10.
Does Sub Assembly Costs are evaluated time to
time from SCM with help of Production for Decisions like Outsourcing and
Production OH Comparison
11.
Does Vendor Networking Exercise is carried out
by SCM?
12.
Does Vendor Recognition Program exist in
Company?
13.
Does ABC Analysis have been done for Stores?
14.
Does Routine Stock Checks are carried out?
15.
Does SCM uses its resources for Market
information Gathering?
16.
Does SCM has Centralized Purchase Authorization
Process?
17.
Does Purchase Price Variation Incidences are
reported regularly with reasoning and authorization for same?
18.
Is SCM is Adequately Trained for Functional
Responsibilities along with Schedule Management
19.
Does Store Department have Model Code of
Conduct?
20.
Whether purchases are initiated only against the
Valid Demands for Procurements
21.
Whether Ceiling for Each Level of Purchase Limit
is Provided with appropriate Budgeting
22.
Whether List of Approved Supplier is Maintained
and Updated Regularly?
23.
Whether Competitive Bidding Process is Applied
for Key Parts Suppliers
24.
Whether Track of Deviated Purchases is Kept in
Separate Accounting Module for Management Reporting Purpose
25.
Whether Long Term Purchase Contracts are Made
with Contingency Clauses
26.
Whether Cash Purchase for Extra Ordinary
Circumstances are allowed?
27.
Whether Purchases Made from Related Parties and
Parties Having Employee Interests are Monitored Regularly?
28.
Is Purchase Function is Decentralized or
Centralized and Efforts are Made for Effective Efficiency
29.
Is Purchase Bids Records are maintained for
Comparison Purpose?
30.
Whether Item-wise Purchase Records are Available
each time
31.
What is Authorization Method for Purchases of
Higher Value and Non-Frequent Purchases
32.
Whether Purchase Order Format is Scrutinized and
Made Standard?
33.
Whether Standard Terms of Supply are Fixed for
All Suppliers
34.
Whether Accounts Department Scrutinizes Purchase
Order Terms and Data for Deviation and Other Aspects Like Inventory Level and
Production Cycle
35.
Whether GRN is allowed only against PO
36.
Whether Production Plan is Shared with Purchase
Department for Inventory Management and Operations Cycle Monitoring
37.
Whether GRN Level Supplier Invoice Scruitiny is
made for Rate and Black Box Method and upon case of variation Any managerial
Authorization process is provided
38.
Whether Upon GRN Goods are checked for Quantity,
Quality, Technical Specification and Essential Aspects of Delivery like Pilferage,
Damage, Short Landing, Spares and Expiry etc.
39.
Whether Goods Inspection Report is Submitted to
Purchase and Subsequently recorded by Accounts Department
40.
Whether Entry Made in Stores Records is
Periodically Cross Verified by Accounts Department and Stock Report is Made
Available to Management
41.
When There is Variation or error in GRN or
Material Received is Short or Excess Reporting of same is Done to Other
Departments and Communicated to Supplier for Same
42.
Also, Payments for Suppliers are Withheld till
Any Discrepancies are Addressed?
43.
What is Process of Goods Return Outward and
Inward and Who Records the Transaction who Cross Verifies same?
44.
What Insurance is Brought for Goods in Stores
and in Transit
45.
Whether GST Entries for Debit Note and Credit
Note are Promptly Made in System and in Accounts for Timely Action
46.
What is Method for Preservation of Stores and
Accounts Records and Whether Purchase Department is Questioned by Accounts for
Reporting?
47.
What is Method for avoiding Double Payments to
Parties
48.
Whether Advance Payments are Promptly Linked
with Each Invoice and then Ledgers are tallied Accordingly?
49.
Whether GRN and Debit Notes and Goods Inspection
Notes are Promptly Linked with Invoices for Error Identification by Purchase
Department and Then Instructs Accounts for Necessary Action
50.
Whether Before Payment all Records Pertaining to
Each Invoice are cross checked by Accounts Department
51.
Whether Customer Issues like Defects and Other
Aspects are promptly marked with Supplier Ledger for Withholding Payment and
other necessary action'
52.
Whether Supplier Accounts are reviewed Quarterly
by Management
53.
Whether Payments are Handled by Designated Person?
54.
Does Company maintain Sufficient Cash to Manage
Quarterly Working Capital Requirement?
55.
What is Method of Dealing with Scrap and Waste?
56.
Whether Periodic Statements are sent to
Suppliers and Clients for Cross Verification and Matching
57.
What is Method for Cash Reconciliation
58.
What is Method for Daily Cash Transactions
Reporting
59.
What is Method for Treatment of For NPA
Suppliers and Clients?
60.
Have SCM have made efforts with PLC Department
for Import Substitution from Locally sourced parts and change in design for
improved functionality?
Directorial Responsibilities in SCM
Functional and Operational Responsibilities in SCM
Personal Level Responsibilities in SCM
Purchase
Manager
Stores
In charge
Production
In-Charge
Warehouse
Personnel
Accounts
In-Charge
CRM
Person Handling Distributors
Site
In-charge in Case of Project Based Organization
Administration
In-Charge for Facilitation Purpose
Finance
Head Responsibilities towards SCM as Client
Role of
CMA in SCM
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