Procurement & SCM BY: DR.AMR KHALLAF

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Agenda 1. Speaker Biography

2. Introduction to Ezz Steel 3. Introduction to Supply Chain Management 4. Supply Chain mapping - Ezz Steel 5. Introduction to Procurement Management 6. Procurement Competencies

Speaker Biography Amr Khallaf is a pioneer in the field of procurement management. He has a solid combination of knowledge including academic excellence with practical applications. Dr. Khallaf holds a Doctorate degree in Business Administration and has been lecturing Procurement, Logistics, SCM, Import & Export Management at the Arab Academy since 2008. Additionally, Dr. Khallaf has more than 20 years’ work experience in procurement management with very strong ties to the business field, market updates and procurement applications. He currently holds the position of Senior Procurement Manager at Ezz Steel, the leading steel producers in MENA region, and his unique performance led him to be awarded the best employee in the company. During his work career so far, he has successfully executed thousands of purchasing transactions, and has developed a comprehensive manual for the procurement function, including the work policies and procedures, which documents the best practices and guiding regulations for the procurement management.

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Introduction to Ezz Steel 4

Introduction Location of Plants

Capacity

Year

Alexandria

3mt

1986

Sadat City

1.0mt

1996

10th of Ramadan

0.5mt

1993

Suez

1.3mt

2002

Total Capacity: 5.8 mt/year

Ezz Steel is among Top 100 steel producers in the world

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Steel Products Rebars

Wire Mesh

Push

Pull

Coils

Rolled Coils

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Steel Production Process

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Supply Chain Management (SCM) SCM is the management of a network of all business processes and activities involving procurement of raw materials, manufacturing and distribution management of Finished Goods

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Internal Supply Chain Executive Management

HR

Marketing

Accounting

R&D

Sales

Finance

Operations

Logistics

PROCUREMENT

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Extended Supply Chains Executive Management

R&D

Information Technology Executiv e Manage ment Informati on Technol ogy

R&D

Informati on Technol ogy

Executiv e Manage ment

Operations

Operatio ns

Supply Manage ment

Finance

Finance

Accounti ng

Human Resourc e Manage ment

Accounti ng

Marketin g

Supplier’s Supplier

LogisticsLogistics

Logistics

Marketin g

Marketin Finance g

Accounti ng

Finance

Operatio ns

Supply Manage ment

Finance

Human Resourc e Manage ment

R&D

Informati on Operatio Technol ns ogy

Supply Manage ment

Logistics

Marketin g

Executiv e Manage ment

R&D

Informati on Technol ogy

Operatio ns

Supply Logistics Management

Supply Manage ment

Executiv e Manage ment

R&D

Human Resourc e Manage ment

Accounti ng

Human Resourc e Manage ment

Marketing

Supplier

Focal Firm Accounting

Customer Human Resource Management

Customer’s Customer 10

Ezz Steel Extended Supply Chain Mine

Energy Source

RM Manufacturer

RM Supplier

OEM

Equipment Supplier

Gas Processor

Energy Distribution

Distributor

Manufacturer /Contractor

Household

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Procurement Management Procurement is the business management function that ensures identification, sourcing and access of the external resources that an organization needs to fulfil its mission and objectives

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PROCUREMENT Vs. PURCHASING Purchasing

Procurement

SCM

Procurement within The supply Chain activities SCM

Procurement Material Planning

Requisitioning

Supplier Selection

Contracting

Delivery Logistics

Warehousing & Operations

Sals & Marketing

Distribution

Procurement connectivity with Extended Supply Chains Executive Management

R&D

Information Technology

Upstream Suppliers

Operations

Procuremen t

Sales

Finance

Downstream Customers

Marketing

Accounting

Human Resource Management

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SCM & Procurement contribution Competitive Advantage to the organization

Lower Total Cost Acquisition Cost Quality Cost Downtime Cost

Cost

Sales

Increases Sales Pricing flexibility Improved Quality Faster to Market

“Every Penny you save is a Net Profit to the organization” Income Statement

Procurement Process 1

2 3 4 5 6

• Need identification (Requirement Forecasting & Planning) • Requisitioning (Purchase Request issuance)

• Supplier Identification & Selection • Contracting (Purchase Order issuance)

• Delivery of Goods or Services • Payment settlement

Procurement Relationships Need / Money

Warehouse

Operations/ Requesting depts.

Goods & Services

Logistics

3PL / 4PL Shipping Lines Freight Forwarders

PROCUREMENT

Legal

Official Bodies

$

Vendors*

Banks

Finance

$

Internal Customers/Partners

External

Organizational Structures Centralized

MRP

Category Management Commodity A

Procurement Dept.

Sourcing & Purchasing Management

Geographical

Local

Decentralized

Contract Management/

Order fulfillment

Value Classification

End Product/ project

High Value

Product X

Small Value

Project Z

Commodity B Foreign Commodity C Location

Supply Research & SRM

Goals of Procurement 1.

Find or develop best-in-class suppliers

2.

Provide an uninterrupted flow of materials, supplies, & services required to operate the organization

3.

Keep inventory investment at a minimum

4.

Maintain and improve quality

5.

Procure required items & services at lowest TCO

6.

Improve the organization’s competitive position

Procurement 7 Rights 1.

the right materials (meeting quality requirements)

2.

in the right quantity

3.

for delivery at the right time

4.

and right place

5.

from the right source (a reliable supplier)

6.

with the right service (both before & after the sale)

7.

and at the right price (in the short & long term)

Procurement career

Knowledge Purchasing principles

Payment Methods

Logistics services

Knowledge Contracting (Legal Aspects)

Delivery Terms Commercial Law

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Skills Negotiation skills Communic ation skills

Problem Solving

Interperson al skills Business Writing

Analytical Thinking Time Manageme nt

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Qualifications PMI-

CIPSProcurement

Program/Project Management

Certification/

Professional Training

ICC-Int’l Trade

APICS-SCM

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Websites www.cips.org www.iccwbo.org www.apics.org www.pmi.org

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Questions

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