Showing papers on "Procurement published in 1992"

An Introduction to Building Procurement Systems

Abstract: Acknowledgements Preface Introduction List of Figures and Tables Chapter 1 The Project Implementation Process Chapter 2 Clients of the Construction Industry Chapter 3 The Concept and Evolution of Procurement Systems Chapter 4 Separated Procurement Systems Chapter 5 Integrated Procurement Systems Chapter 6 Management Orientated Procurement Systems Chapter 7 Discretionary Procurement Systems Chapter 8 Common Variants of Procurement Systems Chapter 9 The Selection of Building Procurement Systems Chapter 10 Successful Building Procurement System Selection Chapter 11 Future Trends in Project Procurement Index

An integrated approach to forecasting and inventory management of short life cycle products

Abstract: This research is an attempt to provide an integrated framework for forecasting and inventory management of short life cycle products. Short product life cycles are becoming increasingly common in several consumer and industrial goods industries. Management of the marketing and production functions for these products presents significantly different challenges than those for longer lasting products. The timing of decisions and the information available for decision making are both affected by the shortened life cycles. The literature on forecasting and inventory management does not adequately address issues relating to short life cycle products. In the first part of this research we develop growth models that can be used to obtain accurate monthly forecasts for the entire life cycle of the product. The models avoid the limiting data requirements of traditional methods. Instead, they extract relevant information from past product histories and use the information on total life cycle sales and the peak sales timing. Empirical testing, on disguised real life data from a PC Manufacturer, validates these models. Model fit and forecast comparisons with traditional approaches show that the proposed models outperform these approaches. Next, we model the inventory management problem for the short life cycle environment. The uncertainty in demand is modeled through the uncertainty in the realized values of the parameters of the forecasting model. The high cost of terminal inventory, shortages and rapidly changing procurement costs are all included in the model. Extensions to the basic model are also developed. Using optimal control theory, we derive a solution that provides valuable information on procurement cutoff time and terminal service levels. A detailed real life example explains the characteristics of the policy and its relevance in decision making. Many of the issues covered in the models were brought to our attention while implementing a forecasting model at a Personal Computer manufacturer. The benchmark monthly forecasts and the associated inventory levels provide information that can be very helpful in planning and controlling marketing, sales and production. By raising some issues this research also provides useful topics for further research in the area of management of short life cycle products.

Worldwide Sourcing: Assessment and Execution

Abstract: Robert M. Monczka is Professor of Strategic Sourcing and The National Association of Purchasing Management Professor at Michigan State University, where he also earned his doctoral degree. Dr. Monczka has authored a number of articles and books, and has conducted research and consulting work in the areas of procurement management and sourcing strategy. Robert J. Trent is currently a Ph.D. candidate in purchasing at Michigan State University. His research interests include the impact of global competition on the purchasing function. Prior to his return to Michigan State University, he held various purchasing and materials positions at Chrysler Motors. There is a need to develop an understanding of functional globalization requirements in purchasing, at both the firm and industry levels. Since this issue has not been addressed, functional purchasing executives may be wondering what the appropriate worldwide sourcing strategy should be for their firm. This article presents a framework that can be used to help identify the worldwide sourcing strategy that best supports a firm's competitive requirements. It recognizes that not all industries require the same level of worldwide sourcing for a firm to be a leading edge competitor. This framework guides managers through an evaluation of the factors that impact a firm's worldwide sourcing strategy development as well as the requirements to pursue an appropriate sourcing strategy. If executive management can identify the strategy response necessary to meet the competitive challenges of the 1990s, it can develop the structure and the systems to support that strategy. This provides a major contribution toward the attainment of a firm's strategic performance objectives. The 1980s witnessed the rise of the global corporation. Firms in many industries developed worldwide strategies to support economies of scale and to develop a presence in markets throughout the world. Throughout the discussions of globalization, it appeared that to be a global firm was good and to not be global was bad--without much in between. Unfortunately, two important areas are usually neglected when discussing the global corporation. First, contrary to popular belief, all companies do not compete in global industries. A global industry is one in which there is some competitive advantage gained by coordinating and integrating activities on a worldwide basis.|1~ Developing production economies of scale or using relatively uniform corporate strategies for entire regions of the world are characteristics of global industries. Some industries, however, do not currently require a global perspective. The second area of neglect is that global discussions often occur at a company-wide strategic level and not at the functional strategy level, which has its own needs relating to different levels of globalization. There is a need to develop an understanding of functional globalization requirements in purchasing at the firm level. Since this issue has not been addressed, purchasing executives may be wondering what the appropriate worldwide strategy should be for the purchasing function within their industry. There is little doubt that competitive pressures during the 1990s will force firms in a wide variety of industries to take actions described as "global." We must recognize, however, that globalization does not simply take on two extremes--either your firm is global or it is not. Furthermore, the level of global pressure across various functions can be different within the same firm. Executives and top management require a systematic approach to address this important issue within purchasing. Top management people in purchasing must decide to what extent their function should embrace worldwide sourcing--and develop strategies accordingly. To compete in some industries, it is possible that purchasing will require an even stronger worldwide perspective than will marketing. There are different degrees of international and global involvement that characterize a firm's worldwide sourcing strategy. …

Selection of Design/Build Proposal Using Fuzzy‐Logic System

Abstract: With the cost of construction to replace deteriorated facilities estimated in the billions of dollars, the Department of Defense is seeking ways of reducing both the time and money spent to provide the high-quality structures needed to support the military mission. Design/build procurement approaches have been proposed as alternatives to the traditional design/bid/build method. The successful selection process for choosing a design/build proposal is based on a high degree of technical factors and a low construction cost. However, the objectives of maximizing the degree of technical factors and minimizing the cost are in conflict, and the evaluation of the technical factors and cost is associated with the uncertainty. In this study, a multicriterion decision-making methodology using a fuzzy-logic system is provided to assist decision makers in selecting the winning design/build proposal that best satisfies the requirement of technical factors and the cost reduction. An example application of the proposed evaluation methodology to an actual project is provided.

Agricultural Statistics of the People's Republic of China, 1949-90

Abstract: This statistical bulletin consists of 285 tables of agricultural statistics for the People's Republic of China. The statistics cover land use, population, labor force, gross value of agricultural output, agricultural investment, crop production, crop sown area, state procurement, livestock inventory and slaughter, animal product output, input production and use, costs of production, consumption of agricultural commodities, selected retail price indices and mixed average procurement prices for selected agricultural crops, and finally, quantity and value of imports and exports of selected commodities. Data are presented for the national level and, when available, the provincial level as well.

Management and Financing of Vertical Coordination in Agriculture: An Overview

Abstract: common in agriculture. Farmer-owned cooperatives are a familiar, widespread form of vertical integration. Farmers form cooperatives to enhance and coordinate markets for the inputs they use and the products they produce. Contractual arrangements in the poultry, swine, fruit, and vegetable industries are examples of vertical coordination achieved through contracts rather than through expanded ownership and control. For processors and retailers, these arrangements can help ensure predictable supplies and consistent quality. For producers, they can offer price stability and access to specialized expertise, information, and inputs. Vertical coordination has long been a focus of inquiry for agricultural economists. This session examines the challenges managers face in organizing, directing, and financing vertically coordinated enterprises in light of recent changes in industry structure and important new developments in the theory of the firm. In this brief introduction, I will set the stage for the longer papers and discussant remarks that follow by identifying three general classes of problems that are of central importance for the managers of vertically coordinated systems and for economists who study those systems. The first problem is that of establishing appropriate boundaries for the firm-of determining which activities should be incorporated into the firm, which should be coordinated through formal contracts, and which should be accomplished through open market transactions. A firm's size and span of control can affect production costs, procurement and marketing expenses, financing alternatives, and access to information. This makes decisions about firm boundaries a critical element in an organization's strategy. While these decisions have important long-term implications, managers must also realize that appropriate firm boundaries can be influenced by technical and institutional changes. Both the search for increased efficiency and the effects of a changing business environment on firm boundaries are evident to-

JIT Implementation: A Growth Opportunity for Purchasing

Abstract: Paul A. Dion is Associate Professor of Management at Susquehanna University in Pennsylvania. He received his doctorate from the University of Toronto. His research interests include purchasing and salesperson performance and the interface of logistics and marketing management. Peter M. Banting is Professor of Marketing at McMaster University in Canada. He received his Ph.D. degree from Michigan State University. Dr. Banting's research interests include sales and purchasing performance as well as a number of international marketing topics. Sharon Picard is a graduate student in the business program at Bryant College in Rhode Island. David L. Blenkhorn is a Professor of Marketing at Wilfrid Laurier University in Canada. He earned his Ph.D. degree from the University of Bradford, West Yorkshire, England, and is the author of a book on purchasing management. This article reports the results of an investigation of the changes in the role of the professional buyer that result from JIT implementation. The researchers interviewed two samples of buyers, totaling 60 respondents, either face-to-face or by telephone. From an operating point of view, the study found that higher product quality and supplier service levels as well as closer buyer-supplier relationships developed. The role of the buyer was found to expand into other functions of the business, such as production and marketing, focusing less on specific transaction details and more on the maintenance of supplier relationships. Implications for practitioners, educators, and researchers are discussed. INTRODUCTION When a firm implements just-in-time (JIT) purchasing there are two broad areas of potential impact for buyers. One is the impact on the procurement operation itself: service levels, financial results, product quality, and inventory levels. These results of JIT implementation have been dealt with by other researchers and represent only a minor part of the research presented here.|1~ A second impact, the major focus of this article, involves the implications of JIT for the role of the purchasing professional. For example, which purchasing activities are expanded in importance, and which are diminished in importance as a consequence of JIT implementation? What new professional opportunities and challenges are encountered by the buyer? These aspects of JIT implementation, although they are of major interest to purchasing professionals, have largely been neglected in published research to date. This article describes the results of intensive face-to-face interviews with 20 purchasing professionals in 18 companies in a variety of industries, and telephone interviews with an additional 40 buyers. The approach is largely descriptive in nature. This is the usual case for initial investigations of a topic, because it is necessary to build an empirical base of observations from which later work can deduce a conceptual framework. BACKGROUND The JIT concept has been adopted widely by purchasing management, so only a brief summary will be provided here. To summarize, JlT reduces inventory by substituting buyer-supplier logistical coordination for inventory. The objective is to draw material through the production and distribution system on an "as needed" basis rather than on a forced feed flow driven by an order quantity. JIT influences the role of purchasing professionals both directly and indirectly. Enlargement of the buyer's participation in forming competitive strategies is an example of a direct influence. Competitive strategy is defined here as the adoption of long-term business plans with the objective of obtaining an advantage over the firm's competitors. JIT is an example of purchasing's contribution to competitive advantage because it can result in operational cost efficiencies for the firm. An example of an indirect influence is seen when a firm reduces its supplier base to create a viable JIT network. …

A systematic supplier selection procedure

Abstract: One of the most important decisions that the procurement department of any manufacturing organization has to make is the selection of an appropriate supplier. This selection will commit the organization and its resources to an outsider for a long time to come, and any mistake in their selection could adversely affect the stability of the organization. As firms reduce their supply base and enter into long term commitments with suppliers, this decision becomes even more important. In this paper a systematic procedure for supplier selection is presented that influence all the relevant factors into the decision, and classifies them into critical factors, objective factors, and subjective factors. It offers a procedure that can be used to evaluate the supplier's performance.

Regulatory controls as barriers to entry in government procurement

Abstract: Until a decade ago, attorneys expert in government contracts occupied a somewhat sleepy backwater in the landscape of legal practice in the United States. 'Procurement law' was largely the province of relatively obscure legal boutiques. Elite firms of the private bar commonly regarded government contracts matters as arcane annoyances to be shunned rather than promising business opportunities to be grasped. Prestigious careers in corporate dealmaking lured the best students in America's leading law schools. By contrast, few law review editors showed an abiding desire to spend a professional lifetime navigating companies through the labyrinth of federal procurement statutes and regulations. Today it is exceptional to find a major law firm without a government contracts department. 2 Although many areas of federal regulatory practice such as antitrust enforcement waned in the 1980s, government contracts became a lucrative boom town of counselling and litigation. Membership in the American Bar Association's Section of Antitrust Law fell by almost one-third from 1980 to 1990, but the ABA's Section of Public Contract Law grew by over 50 percent. Headhunters scoured the legal community for lawyers who could claim to have once read a government contract. Despite a general slump in current demand for lawyers skilled in corporate and commercial law, efforts by private law firms and government agencies to recruit procurement law specialists are thoroughly robust. The modern transformation of the government contracts legal practice stems from a stunning expansion in the 1980s of the regulatory controls by which Congress and major federal purchasing agencies seek to oversee the conduct of government contractors. Virtually every year of the past decade has yielded dramatic adjustments in the federal procurement regulatory scheme, particularly in public governance structures designed to motivate suppliers of goods and services for national defense? Most striking of all, the regulatory upheaval has featured extraordinary, unprecedented emphasis

Competition in procurement

Abstract: High costs, lengthy delays, and poor quality in U.S. major weapon systems procurements have prompted repeated calls for reform in defense acquisition procedures. A leading theme of these calls for reform has been for an increased use of competitive procurement practices. 1 In practice, competition in major weapon systems procurements has come to mean the potential use of a second producer at some stage of the procurement. Dual sourcing and second sourcing are two options that are frequently employed. Simultaneous production from two sources is dual sourcing. One firm may develop the technology and engage in initial production. The technology is then transferred to a second firm, perhaps originally via a relatively high cost 'learning buy.' Production awards are then split between the two buyers, with the majority of production awarded to the firm that was judged to be superior (generally, the lower cost producer) in the previous award. The additional costs of dual sourcing are the second set of fixed costs, technology transfer costs, and reduced movement down the producers' learning curves. The benefits are in terms of improved incentives to reduce costs and increase quality on the part of the producers. Second sourcing involves a technology transfer in the same manner as dual sourcing, but all future production is then awarded to one of the two firms in a one time bidding contest. The competitive bid should reduce the price that the DoD pays for production, relative to a negotiated price in a sole-source environment. Many studies have attempted to determine the savings (in terms of price decreases) from second or dual sourcing. Such competitive practices appear to lower prices, but whether they are cost-effective when additional capital costs are included is uncertain. 2 The surveys and critiques provided by Anton and Yao (1990) and Pilling (1989) however, suggest that methodological difficulties limit the usefulness of these studies.

Value Engineering: A Blueprint

Abstract: The implementation of value engineering results in "more for less, " and it is fast becoming the favored method of planners and engineers to design parts, equipment, and products in a way that will provide the lowest cost without sacrificing reliability. In Value Engineering: A Blueprint, James Brown uses his vast experience to fully explain every aspect of the subject from its history to application. It takes the novice or experienced engineer through every phase of the process, step by step, and even explains how to write a VE report. Value engineering is so critical that Armed Services Procurement Regulations specify that all contracts over a stated dollar value must include either a VE program or incentive clause.

Optimization of energy procurement and load management

Abstract: Programs for optimizing energy procurement are incorporated in the control center of the Pflazwerke AG. A main element in the optimizing strategy is load management. The authors deal with the procedures for energy import optimization based on the results of a load forecast program. Special emphasis is put on load management and the investigations for modeling the load behavior depending on season, kind of day, and temperature. In addition, practical aspects in exceptional situations such as equipment failures are handled. Load management is achieved by ripple control of storage heaters with an installed capacity of approximately 65% of the peak load. >

Small wars, big defense : paying for the military after the cold war

Abstract: One of the most difficult issues facing the United States government is how to maintain an adequate defense in a period of budget stringency. The Iraqi invasion of Kuwait made it clear that the United States must be able to respond to rapid changes in the international scene. On the other hand, with the extraordinary events in Eastern Europe, reductions in US-Soviet tensions, and a worsening budget deficit at home, it is equally obvious that the military budget will be squeezed substantially in the early 1990s. The issue of defense spending is at the forefront of the US political agenda, and with it a host of fundamental questions: How much military strength does the US really need in a post-Cold War world? How can economic policy handle large cuts in defense? And what is to be done with the people and companies now working on defense projects? In Small Wars, Big Defense, Murray Weidenbaum, the former Chairman of the President's Council of Economic Advisors, draws on years of government and industrial experience to offer a provocative look at the troubled US military complex as it confronts a radically changing world. After a careful assessment of present and likely future threats to US security interests, he takes a hard look at the the American military and defense industry, demonstrating how cycles of "feast and famine" in military budgeting have been so wasteful. He calls for a fundamental reform of the spending process, including an overhaul of the procurement system, more sensible ways of paying military personnel, and reductions in regulation of the defense contractors. At the same time, he offers concrete policies on how the American economy can best adjust to large defense cutbacks and move toward a more civilian-oriented economy. Finally, he presents ideas for getting the most out of lower defense budgets, while maintaining the capability to reverse course if necessary. A timely book on the most pressing cluster of political and economic issues of our time, Small Wars, Big Defense will be required reading for planners, politicians, military personnel, and anyone with an interest in the direction of this country's future.

Europe 1992: Macroeconomic Implications

Abstract: Publisher Summary This chapter explains the macroeconomics implications of Europe in 1992. Four broad categories of policy measures are expected to generate beneficial effects. The first is removal of border controls. The second is EC-wide access to public procurement. The third is full capital mobility both for asset holders and for suppliers of financial services, and the fourth is measures to encourage increased competition and scale economies. There are two ways to conceptualize and possibly measure the benefits of Europe 1992. One is to use a general equilibrium model of production to assess the impact of the policy measures on potential output and its growth, assuming that the economy is always at full employment. The other is to evaluate the benefits in terms of a medium-term macroeconomic model where demand factors are critical.

Reliability in Procurement and Use: From Specification to Replacement

Abstract: Partial table of contents: Reliability Basics. Probability Concepts and Applications. Mean Time to Failure and Mean Time Between Failures. LIFE CYCLE COST PROCUREMENT. Life Cycle Cost: Concepts, Constituents and Models. Dependability and Life Cycle Cost. PROCUREMENT SPECIFICATIONS. Allocation of Subsystem Dependability Needs. COMPARATIVE PRODUCT EVALUATION. Product Selection and Evaluation. FAILURE REPORTING AND DATA ANALYSIS. Failure Reporting and Analysis. Aging Analysis of Repairable Equipment. INSPECTION FREQUENCY OPTIMIZATION. Inspection Frequency Optimization. REPLACEMENT AND OVERHAUL POLICIES. Replacement Policies: Concepts, Methods and Models. Replacement with Ongoing Technological Change. Appendices. Selected Bibliography. Index.

Government contracting and procurement: a critical process for both the public and private sectors

Abstract: The costs and benefits of government purchases of goods and services from businesses are examined from the perspective of both public and private sector officials. Generally, governments see more benefits than costs, often because of fiscal stress. Businesses, especially newer, smaller firms are more likely to see more costs than benefits. The article concludes with ten projections for changes in public procurement systems by the year 2000. These are: (1) expansion of current vendor pools; (2) intergovernmental adoption of standardized forms and procedures for getting and staying on government vendor lists; (3) mainstreaming of purchasing into the government financial management decision-making loop; (4) more rigorous training requirements for government purchasing personnel; (5) greater use of public-private task forces to reform procurement policies and practices; (6) greater use of surveys inside and outside government to identify specific problem areas and structure reforms; (7) expansion of the audit...

The usefulness of inefficient procurement

Abstract: Inefficient procurement can be an optimal second best means of encouraging public goods production. In the absence of political rents, politicians have no motivation to incur the costs of setting a procurement agenda. We construct a model where defense contractors earn excess profits and use some portion of these profits to goad or bribe politicians into procuring. The optimal amount of “inefficiency” in procurement is sensitive to the marginal rent seeking cost of obtaining defense contract dollars.

Risk analysis techniques in defence procurement

Abstract: The author explains the risk analysis techniques used by the Accountancy, Estimating and Pricing Services (AEPS), Ministry of Defence, Procurement Executive. The aim of the author is to provide a convenient reference document for procurement staff rather than to advance the theory. Topics covered include identification of risk areas, approaches to risk analysis and strategies for risk reduction and control. The choice of risk analysis technique depends on the definition, scale and phase of the project. All techniques, however, require a systematic approach, so a generalised methodology for risk analysis is proposed. Whilst risk analysis methods and models are valuable tools, the right answers still depend upon judgment and specialist expertise.

New procurement regimes and the spatial distribution of suppliers: the case of Ford in Europe

Abstract: This paper seeks to consider the relationship between new procurement practices and the location of suppliers in the European automotive industry. Using the case of Ford, we show that the supply structure is relatively dispersed and not amenable to just-in-time procurement practices. In this regard more hybrid delivery regimes are to be expected, and that local clusters of small and medium sized firms are unlikely to emerge around pan-European primary firms.

Self-sufficiency and food security in the uk and ec presidential address

Abstract: The political strength in the EC and UK of the belief that high levels of self-sufficiency make food supplies more secure is demonstrated and explained. The relationship is examined analytically and critically, taking particular account of the priority of food, adjustment costs, and linkages between agriculture and other sectors. The need for a policy of food security in Western Europe is discussed in relation to military, crop and trade uncertainties. Finally, the elements of a more rational policy, including measures of storage, procurement and production independence, are outlined.

Rearming Israel: Defense Procurement Through The 1990s

Abstract: Part 1 Shaping arms policy: global rearmament patterns Israel's defence doctrines defence economics the military industrial base new weapons, old politics. Part 2 Arms acquisitions strategies: going it alone made in the USA the middle ground conclusions and recommendations.

The Effects of Management Initiatives on the Costs and Schedules of Defense Acquisition Programs. Volume 1. Main Report

Abstract: : This two-volume paper examines trends in the outcomes (in terms of costs and schedules) of the acquisition programs for major weapon systems, and assesses the effectiveness of management initiatives in improving these outcomes. IDA analyzed a total of 116 major programs that included a mix of aircraft, tactical munitions, electronics/avionics, strategic missiles, satellites, vehicles, and ships. In Volume I of the paper, program outcomes are assessed by equipment type, by time period, by phase (development and production), and by type (new or modification). The initiatives assessed are prototyping, contract incentives, multi-year procurement, design-to-cost, dual- source competition, and total package procurement and fixed-price development. Volume II contains special analyses of ships and ground combat programs. The management initiatives that show the most promise for containing cost and schedule growth are prototyping, contract incentives, and multi-year procurement.