The word “loss” refers us to the system lean 6 sigma, introduced in our company. Its main principle is the detection, analysis, and prevention of hidden losses. The case with spare parts, which I described in the first part of this article is the example of such losses.
Lean 6 sigma inspired us to create a nomenclatural online directory for tender purchases. In the beginning, it numbered 11 thousand items. Yes, it is not so much as in the 1C system, however, it is important how it was forming.
All applications submitted by engineers throughout the year were loaded into the system and accumulated. There were duplicates and wrong catalog numbers. And we realized that we are expected to face many challenges along the way.
First of all, this is the work of the purchasing manager over purging the nomenclature online directory in conjunction with the engineer. This is the human factor, the lion’s share of purging was done manually, although the software was also used.
As a result, the project was completed and it turned out that not everything was as terrible as it seemed at first, and I confirm this with figures.
Only four purchasing managers worked on it without interrupting the main work. We were doing it at the end of November when we had the least active season of purchases.
Each manager spent only 1 hour of his working time per day on this process, and only three managers worked for 30 days in this mode, and one — five full working days.
We reduced the online directory of 11 thousand items by 38% (duplicates, synonymous duplicates, incorrect catalog numbers). In order to avoid the accumulation of this unnecessary information in the future, we have established the functionality of the nomenclature controller for our managers.
Now, when submitting an application, the engineering service, without finding the required nomenclature position, simply prescribes this catalog number, and the manager enters it into the directory or does not enter if consulting with the engineer. That is, we identify mistakes before the start of the tender and before the purchase.
Since then our nomenclature base has grown, but the percentage of incorrect nomenclature numbers that were duplicated was only 0.3%.
At the same time, all this is in a single electronic system, all processes are automated and standardized. Today, the purchasing manager spends 15 minutes to process the tender for 70 nomenclature items, for which there are 7 offers.
Previously, it took much more time, which was spent in order to find each item in excel or pdf format.
This gave us the opportunity to optimize the purchasing department, reducing its staff from five to three people.
The engineering service can observe every stage of the tender at any time in the system, who is the supplier is and when is the delivery to be.
Now we can analyze who are our key suppliers are, what trades we have with them. And the most important analysis we receive from the system is the prices.
The deviation of the price of the current purchase from the previous one in one nomenclature can have different reasons: perhaps earlier we were offered an unoriginal spare part, but now on the contrary. Perhaps you need to negotiate with the supplier.
The market of spare parts is specific. Today every second supplier is engaged in John Deere. And if he is engaged in quality John Deere or not quality, this is very important for us. Therefore, at the moment we are holding closed tenders on spare parts.
WHATEVER SYSTEM YOU CHOOSE, IT IS IMPORTANT THAT IT ADJUSTS TO YOU, NOT YOU ADJUST TO IT.
We have a formalized list of suppliers, approved by the company, which includes, first, all official dealers for the brand, and we have quite a mixed equipment.
There may also include “gray” dealers. But these are companies with which we already have work experience or we met them at exhibitions. And we certainly conduct the verification of them and their legal documents when registering on our tender platform.
We get acquainted with such companies, approve our commercial conditions with them. We conduct several trial deliveries to see if we are satisfied with their quality. In a word, new suppliers are under our special control.
In the end, whatever system you choose, it’s important that it adjusts to you, not you adjust to it. Although if it stimulates to change your business processes, to increase efficiency, then it is perfect.
Antonina Gereta, Senior Purchasing Manager Agrogeneration
Theses of speech at the Agrarian Conference of ProAgro Procurement Specialists were used.