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P2P DIRECT MATERIALS
BY PARISH PATHRABE
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Direct materials is the materials which
describe in BOM (Bill of materials) For example RM, transportation cost & salary Indirect materials is the materials which we
consume and take help of them but not describe in BOM
For example tools,machinary & equipment
Meaning
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Classification
Procurement
Fixed Expenses
Salary Depreciation
Variable Expenses
Direct Materials
Direct Labour (Pay as per
hours)Transportation Materials
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Y=mx+c
Where, Y=output mx=variable expenses c=fixed expenses
Equation
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In short period(time zone) , fixed expenses are
fixed & variable expenses are variable. But in long period (time zone), all (Fixed
+Variable) expenses are variable . So you can control your expense in long run
process
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Vision (long term goal) Mission (short term goal) Code of conduct Core value- it include transparancy policy,gift
policy
Every company have
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Employees Suppliers Customers Shareholders Society
Stackholder
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Every good company focus or attack on triple bottom profit line Economic profit Societal profit Environment profit In short, we can say that People(Society), Planet
(Environment) & Profit(Economic)
Bottom line
if all profits are in green,then we consider as good business
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Vision Quality & reliabilty Product appeal & styling Customers satisfaction Lowest ownership cost Relevant cost with effective technology More content at a price pointMission Love the product
Strategy
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All strategic model must meet the vision &
mission Covering all touch points of customers
expectation Network Sales Products
Strategic objective & goal
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Ability to innovate Contemporary styling Technology
Core competencies(Value)
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Market share Top players Competitors Product & their price Brand image/Customer satifaction/ServiceAlso focus on current market position, Young players Sales % of other including domestic also
Know about the market
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Segment gap Expand production Improve penetration through network Satisfaction score New market which increase your market share Employee engagement (Belongingness)NOTE: Organic growth: By build new plant or new warehouse Inorganic growth: By merging or acquire
Focus on
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Financial prospective Customers/ Market prospective HR prospective Business prospective -Quality
-Vendor rating-Capacity-Product introduction
Also focus on
All are internally connected
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Acquisition of cutting edge technology through JV,
technology agreement, merger acquisition Vendor selection based on strong technology &
management Limited vendor is good for the company Vendor practice & their benchmark Develop healthy vendor base to support
Sourcing strategy
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Purchase in bucket manner Complexity is high ,suppliers are more
Important terms: CKD - Completely Knock Down SKD – Semi-complete Knock Down SKU – Stock Keeping Unit
Global purchasing strategy
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Purchasing from the productcomponent with best
quantity Develop advance technology is competative
advantage Low cost of production Economic scale and update technology
Technology