PROCUREMENT IMPROVEMENT OF RAW MATERIALS IN A FOOD SEASONING PRODUCTION COMPANY

Abstract

In terms of sourcing and purchasing, uninterrupted flow of raw materials for company operations, find reliable alternative sources of supply, buy at the most economic order quantities best value (a combination of right quality at right quantity at the best price with the best supplier service) and maintain good relations with vendors are significant points to concern. The threats of intensified competition in terms of price and service along with raw materials scarcity are two significant points for the procurement department to consider. This project attempts to improve the procurement efficiency in terms of price and supply risk of selected raw materials using in a food seasoning company. By analyzing current problems and historical data, those raw materials can be classified and located in supply positioning model. Finally, proper strategies and action plans are applied based on supply position of each raw material and summarized for the improvement result. The results show that the total expenditure of selected raw materials are decreasing from 238,667,100 THB to 220,966,525 THB or 7.42%. For the supply risk aspect, there are 8 raw materials which are classified as high risk before implementing the improvement project. After applying the purchasing improvement project, there are no raw materials classified as high supply risk.