Combined Supplier Selection Method Based on Multicriteria and Total Cost Evaluation with the Toolkit for Strategic Decision-Making
MAGAZINE №1 (102) - 2021
AUTHOR BURLAKOVA I.V.
CATEGORY Sourcing
ABSTRACT
For today there is no single universal methodology for evaluating and selecting a supplier. Each commercial organization develops an assessment methodology individually, based on a variety of criteria that are considered important, or focusing on the cost of purchase. The downside of choosing a vendor based on cost criteria only is ignoring other significant criteria, while systems with multiple criteria often allow valuation bias and options for result manipulation. In this article modern methods of supplier evaluation are analyzed, giving more attention to the most common ones. Taking into account their merits and shortcomings, the author's combined method has been developed, which consists in simultaneously assessing the supplier with multicriteria and single-criteria (total cost method) methods and decision-making using the Edgeworth-Pareto method. Pareto-suboptimal solutions are cut off by an algorithm based on Pareto optimal set formula. The remaining options are assessed by the purchasing manager in terms of strategic importance by applying the "strategic matrix of supplier choice" proposed by the authors. It is a modification of Kralich matrix, adapted to the task of supplier selection, for which the author's scale of assessment is proposed. The proposed supplier evaluation method allows to compare the financial benefits of selecting a particular supplier and a combination of other significant factors, and make an informed managerial decision.
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Disruptions to Supply Chains in Automotive Industry During COVID-19 Pandemic
MAGAZINE №6 (101) December 2020
AUTHORS BORZOVA T.
CATEGORY Analysis in logistics and SCM Industrial companies’ corporate logistics Supply chains reliability and sustainability Sourcing Supply chain management
ABSTRACT
The COVID-19 pandemic severely hit most industries and revealed a number of problems businesses were not prepared for. Manufacturing was one of the most vulnerable industries unlike companies involved in software development. Global lockdown and border closures broke the supply chain of materials and car parts. Car manufacturers and their suppliers were forced to find creative solutions to cope with the situation within a short period of time. The author of this article analyzes the effect of the pandemic on the U.S. vehicle manufacturing – members of the automotive supply chain from suppliers of raw materials to distributors and final consumers in particular. In addition, the author considers positive and negative effects of the government support. Finally, the author suggests several ideas that would make supply chains more flexible and adaptive to serious global issues in the future.
Keywords: supply chain planning procurement suppliers supplier map purchasing power unemployment distribution maketoorder
Improving Supply Logistics Efficiency Based on Blockchain Technology
MAGAZINE №3 (98) June 2020
AUTHORS KOLOSOV A.M.
CATEGORY Information technologies in logistics and SCM Simulation modelling Sourcing
ABSTRACT
The economic feasibility of using Blockchain technology in procurement procedures still raises a number of questions for managers and employees of companies that plan to implement this technology to solve the problems of departments involved in procurement activities. A number of Russian and foreign works devoted to application of Blockchain technology in the given direction in any way do not touch a question of economic substantiation of using this technology, though point at perspective of its application. The work reviews existing information decisions on the basis of Blockchain technology in the field of logistics and supply chain management and calculation of economic efficiency of Blockchain technology use at carrying out purchasing procedures by means of simulating the modeling process of purchases in AnyLogic software environment.
Keywords: Blockchain smartcontract procurement sourcing information technology simulation simulation modelling simulation model AnyLogic
Management of Production Inventory in Rail Transportation
MAGAZINE №5 (97) April 2020
AUTHORS TSEVELEV A.V.
CATEGORY Service providers’ corporate logistics Logistic infrastructure Sourcing Inventory management
ABSTRACT
The article presents and analyzes methodological and practical problems of forming and managing production stocks of railway transport. The relevance of scientific research requires finding points of "bifurcation" on the railway polygon in order to timely control, analyze and evaluate the effectiveness and efficiency of the planned logistics business process of logistics for railway transport enterprises according to the optimal scheme of inventory management. The paper deals with a range of specific issues of the system of rationing the material and technical resources consumption in JSC "Russian Railways"; the information base for the development and adjustment of consumption rates; issues of improving inventory management of material resources. A functional model of the process of managing the cost of losses in the logistics system associated with the absence and excess of inventory of MTR at the bases and warehouses of JSC "Russian Railways", as well as a logistics concept for managing production stocks at railway transport enterprises. The core of the problem in this issue is corporate governance in JSC "Russian Railways", internal control in the MTO system of railway transport by the presence or absence of material and technical resources in the reserves, aimed at effective management of business units.
Keywords: procurement railway transport logistics of railway transport stocks production stocks
Digital Procurement Technologies in the Context of Recent Research
MAGAZINE №1 (96) February 2020
AUTHORS ALYAMOVSKAYA N.S., LEVINA T.V., ELYASHEVICH I.P.
CATEGORY Analysis in logistics and SCM Analytics and reviews Sourcing Modern concepts and technologies in logistics and SCM
ABSTRACT
The article presents the current state of digital procurement technologies adoption in Russia compared to other countries. Major implementation barriers are highlighted. The research is based on consulting companies’ surveys, scientific publications and other relevant sources. Thus, main problems companies face during digital transformation of procurement were grouped by six perspective factors: technologic, organizational, competence-based, methodical, opportunistic and regulatory factors.
In particular, authors note that even taking into account high popularity level of digital procurement, there is still no single position about defining which technologies should be treated as “digital”. Authors attempt to determine the set of these technologies correlating them with “end-to-end” digital technologies classified in Roadmap for digital technologies development in Russia. Special accent is laid on the fact that sourcing is not the subject of systematic research in Russia either for academic or for consulting fields.
Most of international research is conducted by suppliers/developers of IT-based solutions, by companies providing outsourcing and/or by consulting companies, which leads to doubt in objectivity of conclusions and recommendations resulting from the research.
The authors make conclusion about the most popular directions of procurement digitalization in Russia based on open access references analysis: press releases, media publications. The authors conclude that modern systematic development of methodology for “intellectual” filling of digital technologies is limited, namely in sourcing risk identification and assessment sphere, in event management, in reference models for operations algorithms, in what-if analysis, in controlling, in factor cost analysis, in behavior models for “supplier-client” interaction, etc. Besides, a huge gap between modern technologies functionality and procurement specialists’ skills and knowledge still exists. Finally, a low level of labor automatisation in procurement is Russia’s specific feature. This conclusion is supported by analysis of requirements for procurement positions candidates that was conducted by the authors.
Keywords: sourcing procurement digital technologies digital transformation digitalization
Suppliers’ Segmentation: Analysis of Current Tools and Development of New Approach to Problem Solution
MAGAZINE №5 (94) October 2019
AUTHORS ALYAMOVSKAYA N.S., VINOKUROVA V.O.
CATEGORY Analysis in logistics and SCM Logistic integration and coordination Sourcing Modern concepts and technologies in logistics and SCM
ABSTRACT
The article provides an overview of approaches for supplier segmentation: in particular, different matrices for evaluation (standard and modified) as well as maturity models and questionnaires. Therefore, the analysis of the advantages and disadvantages of these methods is carried out. It is concluded that most methods give only general recommendations that do not allow to make a decision on specific tools to improve relationships.
The authors develop a two-stage procedure for the suppliers' classification. The first stage is carried out based on ABC analysis and the second takes into account two synthesized criteria for evaluating purchased resources and suppliers, which, in particular, include the costs of switching to other resources, the product differentiation level and meeting planning key performance indicators by suppliers. A matrix for tool selection to improve suppliers' relationships in accordance with the results of their segmentation is developed.
This procedure is also tested on the example of a telecommunications company and some effects of implementing the selected tool are shown. The limitations associated with the use of the developed tool in practice are determined.
Keywords: supplier procurement purchasing Supplier Relationship Management supplier selection VMI EDI
Prospects of Blockchain Technology in the Automatization of Procurement
MAGAZINE №6(89) December 2018
AUTHOR KOLOSOV A.M. - Postgraduate student, Department of Logistics and Supply Chain Management, National Research University Higher School of Economics (Saint-Petersburg, Russia)
CATEGORY Analytics and reviews Information technologies in logistics and SCM Modern concepts and technologies in logistics and SCM Sourcing
ABSTRACT
Today the increase in productivity and efficiency of the companies is directly connected with information technology development. Application of modern information technologies in logistics and supply chain management are needed to reduce costs and improve process efficiency. One of the most relevant directions in the field of logistics, in terms of process automation, is the purchasing activity of the companies. In relation to purchases, one of the most perspective technologies is the blockchain technology. Blockchain is a distributed database and the corresponding management system of current distributed database, by means of which the considered technology is implemented. This technology allows automating process of transactions in information systems of the companies by using smart contracts. It is declared, that use of this technology will allow to automate and optimize several processes related to purchases and other directions. However, the novelty of this technology creates some risks connected with the implementation of systems based on blockchain technology and lack of the legislative base. In this way, it is necessary to carry out the blockchain market status assessment and the analysis of risks and further perspectives of applying this technology. The article includes examples of the existing blockchain projects, considers analytical data of research about potential perspectives of technology and systematizes information about the possibility of use blockchain technology in purchasing activity of the companies. The analysis shows areas of purchasing activity where the use of blockchain technology is most justified, what problems need attention and what changes are happening in the blockchain market now.
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Supplier Scoring and Assessment Methodologies in the Context of Procurement Function Maturity. Typical Methodology Mistakes
MAGAZINE №2 (79) April 2017
AUTHOR BURLAKOVA I.V.
CATEGORY Sourcing
ABSTRACT
The supplier estimation and selection process is far from the TCO (Total Cost of Ownership) concept usage in many Russian companies. The majority of companies generally focus on the price, paying no attention to other significant for finances factors. In this article the correlation between the company’s procurement function maturity and the applied supplier estimation and selection methodology is provided. The widespread mistakes of typical methodologies usage are discussed. The recommendations for taking into account the maximum number of significant factors are given. Also, the ways for changing estimation models from one to another, more advanced, are mentioned. The conclusions about the different methods usage practicability on different companies’ evolution stages and the necessity of reconsidering and changing these methods with the companies’ increase and development in order to correspond with the global tendencies are made.
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Contract System in State Procurement: Logistic Management Perspectives
MAGAZINE №6 (77) December 2016
AUTHOR ELYASHEVICH I.P.
CATEGORY Sourcing
ABSTRACT
The law on the contract system, which regulates the purchase of state and municipal sphere, admits the possibility of laying a centralized authority to determine the supplier to the specialized public authorities. Representing the interests of a group of subordinate organizations located in some geographical areas or operating in certain sectors of the economy, such "single customer" can perform a number of functions to be implemented at the moment consumers of material resources independently. For example, the collection of applications and consolidation, preparation and conduct of suppliers determination procedures, contracting, supply control, and so forth.
The volume of purchases by considered separately customers is disproportionately less than the consolidated need of companies from a certain sector of the economy, formed on the same resources. As a result, customers lose the opportunity to obtain wholesale discounts when placing large orders direct from the manufacturer. The lack of centralized control leads to the necessity of keeping the customers to own expense warehouses, paying for the additional handling and increasing the cost of warehouse processing in case of the disaggregation of batches.
The calculations were performed in comparable rates in the form of a feasibility study of the project, involving the formation of a centralized organ of management of material flows in the public sphere. To determine the period of return on investment, calculated simple payback period (payback period – PP).
The calculations given in the article show that the usage of logistic principles in the management of public and municipal procurement can achieve significant savings of budget funds that are allocated in a fairly limited quantities, given the current state of the economy. In addition, investments in fixed assets, which have to do with building infrastructure "single customers" pay off in a relatively short period of time.
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The Implementation of «Lean Production» Concept in Logistics Supply
MAGAZINE №4 (75) August 2016
AUTHORS
KUZIN D.A. - Cand.Tech.Sci., Associate Professor, Department of Production Management and Logistics National Research University Higher School of Economics (Nizhny Novgorod, Russia)
NEMCEVA E.A. - Researcher,Department of Production Management and Logistics National Research University Higher School of Economics (Nizhny Novgorod, Russia)
CATEGORY Modern concepts and technologies in logistics and supply chain management Sourcing
ABSTRACT
The article describes the results of the application the "Lean Production" concept at the structural division of the telecommunications company «Vimpelcom», in order to increase the efficiency of procurement business processes. The relevance of the topic is specified by the needs of the local companies that are forced into difficult economic conditions to improve the efficiency of their activities not at the expense of investment, but a result of the organizational improvement. The concept of "Lean Production" is one of the currently available ways to reach this goal. The article elaborated Lean - measures aimed at improving the efficiency of the purchasing department and carried out assessment of the economic efficiency of their implementation. As a result, the value stream analysis suggested a simplified diagram of the procurement for special corporate credit cards for payments with the approved suppliers and a simplified speed control circuit, when the complexity of the procurement approval process is determined by the sum of the payment. The methodology for the rating of complex assessment of supplier performance is described according to the "Lean Production" concept.
The method and results of calculating economic efficiency of the four alternative options are given for the use of the resources dismissed as a result of Lean - reforms; in particular it is proved that the best alternative is the employment of the released purchasing department employees after retraining. A special reporting tool for lean production - Box Score, which allows considering not only the financial results, but calculating the degree of resources utilization (productive and nonproductive time e.g.), is applied for the first time in domestic practice.
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