A reactive approach to material procurement in an SME

Abstract

The purpose of this paper is to introduce a more reactive approach to material procurement in a small manufacturing enterprise (SME). The approach involves a hybrid top-down and bottom-up approach to the issue of material procurement. The implementation of the approach in the test site is discussed and we show how the company can benefit from its implementation. The approach requires that there is a good interaction and transfer of information between an SME and both its customers and suppliers. The approach also requires a manufacturing firm to have control of the shopfloor and to have access to relevant and accurate information from the shopfloor. This hybrid approach to material procurement coupled with improved production activity control has helped a local manufacturing company to increase its reactivity. A decision support software tool is available which supports this approach and is described in the paper.

Keywords:

• small manufacturing enterprises
• materials procurement
• JIT purchasing