The article is based on the authors’ practical experience gained in a large manufacturing company engaged in unit production for individual orders. The assembly enterprise offers highly customized products tailored to customer needs, where production preparation processes are of key importance. The company’s products have complex material structures ranging from 500 to over 1000 assemblies and generic parts per product. An increase in the degree of customization involves shifting the decoupling point, where the main inventory is created in the logistics system, towards raw materials and sub-assemblies.
As part of the work on building a procurement management system dedicated to the production conditions described above, the authors performed a segmentation of assortment items using ABC/XYZ analysis. The results of the analysis confirmed the distinctiveness of this enterprise’s operating model compared to mass-market manufacturers.
Distinctiveness of ABC/XYZ segmentation results
As a result of implementing the first three steps of the framework methodology, material indices were assigned to the appropriate groups according to ABC and XYZ classification. Figure 1 presents the results of the analysis. The obtained results were not a surprise to the authors, but merely a confirmation of earlier hypotheses. The significance of goods from the AX group, described in the literature, was not confirmed. Furthermore, literature studies suggest that BX, CX, and AY groups are also important, which also did not apply to the analyzed enterprise. By conducting the analysis, the results of which are shown in Figure 1, the authors proved that the construction of a strategy for implementing the procurement function should take into account the specificity of a given enterprise. In this case, it turned out to be high product customization, which translated into a very large number of assortment items with high consumption variability.
Concept of a methodology for building a procurement management system
The analysis in the initial phase would also include the validity of implementing an ERP class system, however, due to the fact that the company had already decided to implement such a system, this point was omitted in the article. Undoubtedly, the enterprise needs one consistent database, but due to the very high customization of the manufactured products, the implementation of a system tailored to the company’s needs should be considered. ERP systems are characterized by very high stability, but adapting them to the company’s needs is very time-consuming and costly, and any changes to earlier design assumptions are difficult to implement.
Based on our own research, the research methodology presented in Figure 2 was developed.
The article comes from the journal “Logistyka” 2/2010.