Purchasing Management From The Perspective Of Supply Chain: Timken Case Study

Worldwide economy is integrated intensively along with the more and more flourishing globalization and growing market competition, at the same time, business environment which enterprises are facing is becoming more and more complex. In order to utmost minimize the uncertainty in material supply and products demand, and obtain the competitive advantages in market, the enterprises have to make efforts in improving themselves to ensure supply chain management including cost, quality, delivery and service to be the core of the competition among multi-national. The competition between individual enterprises has gradually been replaced by supply chains competition. Especially with more and more knowledge to supply chain management(SCM), the idea of the purchasing management having the value added function is accepted by most of enterprise supervisors. Purchasing as an indispensable part of supply chain infiltrates into its all processed. Efficient purchasing management not only helps enterprises reduce their cost and improve the competition, but also create new competitive strength by realizing in integration and harmonization of all activities in supply chain, then keeping enterprises advantage further in rapid and changeful markets.Supply Chain Management(SCM), a business model of production planning and inventory controlling management. The company controls of its supply chain will influence decisions of other companies in the whole supply chain. Therefore, starting from the whole supply chain, material requirements out of a single company, need to be reviewed with a full supplier chain optimization, as well as other company in the supply chain, A series of action to be taken as setup a mechanism of information integration and sharing, program synchronization, production synchronization, implementation of the pull production strategy, improvement on plan period, shorten the lead time, control the production schedule, improve production efficiency, enhance business processes between organizations, institutions and the efficiency, customer-oriented demand-driven and customer-oriented production plan to get the production of flexible and fast market responsiveness, and thus gain market competitiveness.We select the subject of procurement management to study Timken a sample, as the current operation of manufacturing process, based the purchasing management and supply chain theories, to analyze it’s inner-outer circumstance by SWOT method to clarify it’s competitive position, it put forward two tactics to enhance the company’s competitive position:One is based on supply chain management, how production planning&control works and another is to define the estimation standard for supplier’s performance to enhance supplier management.Firstly, it introduces the conception, such as the thought of SCM, the conception of purchasing and purchasing management and development history. Comparing the traditional purchasing management with the purchasing management of SCM. Final conclusion:SCM as a new powerful business model, it’s an efficient method of a company take competition in the new environment as well as global competition; implementation of SCM, must make use of latest information technology to integrate information from whole supply chain, including suppliers and customers; Timken setup an world wide database and connection to a third party data center based on internet platform, to establish information sharing mechanisms between suppliers and customers. The scale of resources to achieve the effective use of resources to improve the overall efficiency of the purpose; In order to activate the supplier’s enthusiasm and allocate purchasing order to suppliers reasonably, we evaluate and score suppliers based on quality、delivery, price and cooperation every monthly and allocate PO based on this score. By this way, to enhance the performance of the whole SCM.