Internal purchase process: a study for setting improvement target

Abstract

Purchasing is an essential activity in every business. A shorter lead time in purchase cycle can lead to competitive advantage and just in time purchases, leading to low inventory requirements at operation locations. The purchase cycle process has two parts, an internal process - purchase request to purchase order release and an external process - supply of material by vendor(s). There are possibilities of delays during the course of the internal process of the purchase cycle and hence needs improvement. In continuous improvement process techniques, a determination of the current process base line, i.e., current operations actual performance and thereupon the improvement goal needs to be identified. This paper presents a case study of a manufacturing industry purchase internal process lead time. This study would benefit purchasing managers/executives to design their purchase process base line and improvement targets, using statistical tools and techniques for an efficient process improvement.