Supply Chain Management and Purchasing Principles Diploma KNEC Notes

Introduction to the Module Unit

Supply Chain Management and Purchasing Principles is a unit offered to diploma students in business related courses to equip them with the right attitudes, knowledge and skills to be able to perform purchasing and distribution functions effectively in an organization.

General Objectives

By the end of this module unit, the learner should be able to:

• Discuss the importance of the Supply Chain Management to an organization
• Explain the elements of Supply Chain Management in an Organization
• Outline the procedure of sourcing for materials and ordering materials
• Describe the activities involved in the process of receiving and inspecting incoming materials
• Explain the procedure followed in the payment of suppliers
• Outline the role of physical distribution in purchasing materials for an organisation

Topics/Course Outline Required by KNEC

Topic 1: Supply Chain Management and Purchasing Function

1.1. Introduction to supply chain management

1.2. Internal and external supply chains

1.3. Elements (scope) of supply chain management

1.4. Supply chain management decisions

1.5. Meaning of purchasing

1.6. Importance of purchasing function

1.7. Objectives of the purchasing department

1.8. Relationships between purchasing department and production department

1.9. Internal organisation of purchasing department

Topic 2: Quality and Quantity Determination

2.1. Meaning of quality and quantity

2.2. Factors to consider in determining quality of materials

2.3. Purpose of specifying materials

2.4. Features of a good specification

2.5. Methods of materials specification

2.6. Factors in determining quantity of materials to buy

2.7. Methods used in determining quantity to buy

Topic 3: Determination of Price and Right Time to Buy

3.1. Meaning of price and time

3.2. Importance of determining price of materials

3.3. Factors influencing prices of materials

3.4. Methods of pricing materials

3.5. Factors in determining the right time to buy

3.6. Distinction between lead time and delivery time

Topic 4: Sourcing

4.1. Meaning of sourcing

4.2. Factors to consider in determining sources of supply

4.3. Sources of information about potential suppliers

4.4. Types of sources of supply

4.5. Methods of sourcing

4.6. Documents used in sourcing

4.7. Criteria for evaluating potential suppliers

Topic 5: Ordering Procedure

5.1. Importance of following the purchasing procedure

5.2. Purchasing/ordering procedure

5.3. Documents involved in ordering/purchasing procedure

5.4. Types of orders

Topic 6: Receiving and Inspection of Goods and Services

6.1. Meaning of receiving and inspection

6.2. Factors considered during receiving and inspection

6.3. Importance of inspecting incoming goods

6.4. Methods used to inspect incoming goods

6.5. Documents used in receipt and inspection process

6.6. Options of treating rejected goods.

Topic 7: Payment Procedure

7.1. Meaning of payment

7.2. Factors considered in processing payment claims for suppliers

7.3. Documents used in payment process

7.4. Methods of payment

7.5. Commitment register

Topic 8: Physical Distribution

8.1. Meaning of physical distribution

8.2. Components of physical distribution

8.3. Importance of physical distribution

8.4. Factors considered in selecting transportation mode

8.5. Documents used to facilitate transportation of goods

Topic 9: Emerging Issues and Trends in Supply Chain Management and Purchasing Principles

9.1. Emerging trends and issues in Supply Chain Management and Purchasing Principles

9.2. Challenges posed by the emerging trends and issues in Supply Chain Management and Purchasing Principles

9.3. Ways of coping with the emerging trends and issues in Supply Chain Management and Purchasing Principles