ISO 14000

The definition of ISO 14000 that related to environmental management that exist to help organization to minimize:

1. Their operation, their negatively affects of environment such as cause adverse change to air, water, and land.
2. comply with the applicable laws and regulations.
3. continually improve that the above.

ISO 14000 is similar to ISO 9000 quality management in that both certain to process of how a products is produced, rather than to the product itself. As with ISO 9000, the certification is performed by the third-party organizations rather than being awarded by ISO directly.


The benefits that implementing on ISO 14000:

Operational benefits
    - Efficiency, discipline and operational integration with ISO 9000
    - Also helps reduce pollution.
    - Saving from safer workplace conditions.
    - Reduction of cost that discharges, waste handling, transport,disposal

Environmental benefits
    - Minimize hazardous and non-hazardous waste.
    - Prevents pollution and reduce wastage.
    - conserves natural resources such as electricity, gas, space, water with resultant, cost savings.

Marketing benefits
    - Demonstrate to customer that the firm met environmental expectation.
    - Improves international competitiveness
    - Provides a competitive marketing tool.
    - Delivers profits from marketing "Green" products.

Financial benefits
    - Improves organizations relationship with insurance companies.
    - Eliminations of cost associated with conformance to conflicting national.
    - Although helps to reduce risk and liable.
    - Improves access to capital.

ISO 14000 series:

• Environmental Management System (EMS)
• Environmental Auditing and Related Investigations (EA&RI)
• Environmental Labels and Declarations (EL)
• Environmental Performance Evaluation (EPE)
• Life Cycle Assessment (LCA)
• Terms and Definition (T&D)

The conclusion of ISO 14000 family consists of standards relating to environmental management systems (EMS) and others which are tools to help the organisation realize its environmental policy, objectives and targets, and classify them by application:

• At the organizational level (implementing EMS, conducting the environmental auditing and related investigations, and evaluating environmental performance). 
•  For products and services (using environmental declarations and claims, conducting life cycle assessment), addressing environmental aspects in product standards, and understanding terms and definitions). 

ISO 14001:2004 ensures that organisations are aware of environmental aspects of their work in order to minimize negative impacts and improve environmental performance. ISO suggests that the Standard can provide significant tangible benefits, including:

•  Reduced raw material/resource use. 
•  Reduced energy consumption. 
• Improved process efficiency. 
• Reduced waste generation ad disposal costs. 
•  Utilization of recoverable resources. 

        The Standard can be implemented by a wide variety of organisations, whatever their current level of environmental maturity. However, a commitment to compliance with applicable environmental legislation and regulations is required, along with a commitment to continuous improvement. The standard has the aim of making it easier for small and medium-sized enterprises (SME's) to understand, set up and benefit from such systems.

ISO 9000

Assalamua’laikum w.b.t.,

Today my group can give information about ISO 9000 to you all.

       Firstly we explain what is ISO 9000. That is a set of quality standard develop by the international organization for standardization (ISO). The focus of the standard is to establish quality management, procedures, through leadership, detail documentation, work institution and relevel keeping. ISO 9001 is a set of standards that document the implementation of a quality program.

       The ISO is about the quality products. The quality is something every company strives for and is often time very difficult to achieve. ISO 9000 is a quality management standard that presents guidelines intended to increase business efficiency and customer satisfaction. The goal of ISO 9000 is to embed a quality management system within an organization, increasing productivity, reducing unnecessary costs and ensuring quality of processes and products.

        There are 3 main types of audits.

1.      Organization can get feedback quickly from those who know the company best.

2.      Allow for a consumer to evaluate the performance on an organization.

3.      Many companies choose to become certified with ISO 9000.

        The importance of ISO 9000 is the importance of quality. An organization can identify the root of the problem and therefore find a solution. By improving efficiency, profit can be maximized. The company not only do businesses recognize the importance of the ISO 9000, but also the customer realizes the importance of quality. And because the consumer is most importance to a company, ISO 9000 makes the customer its focus.

8 type of ISO 9000 principles. That is:

1.      A customer focus.

2.      Good leadership.

3.      Involvement of people.

4.      Process approach to quality management.

5.      Management system approach.

6.      Continual improvement.

7.      Factual approach to decision making.

8.      Supplier relationship.

The primary requirements for ISO 9001 include:

·         Establishing a set of produres that cover all key processes in the business.

·         Monitoring processes to ensure they are effective.

·         Keeping adequate records.

·         Checking output for defects, with appropriate and corrective action where necessary.

·         Regularly reviewing individual processes and the quality system itself for effectiveness.

·         Facilitating continual improvement.

        ISO 9000 is a standard created to make the attainment of quality, consistent products easier by providing specific steps for development of an organization’s quality management system. This quality management system is meant to monitor the progress of a product or service as it goes through each stage of production, from development to testing to assembly to customer feedback.

          ISO 9000 is seen in every sector of the business world and its success is a testament to its worth. With a focus on customer satisfaction, products and services improve under ISO 9000 quality management system. And the last, ISO 9000 is a good foundation for small businesses that want to expand their market because this may create business opportunities that were not available before an objectively verified quality management system was in place.

Thank you :)

Benefit of Partnership

Assalamualaikum and a very pleasent day a bit to all of you.

     Hey guys! How are you today? Hope you are in the pink of health. Today, our group will present more detail about the ‘Benefit of Partnership’. We hope all of you can learn and get some information through this topic today. This topic also related in our purchasing subject. Before we go so deep about this topic, let us know first what is exactly partnership is. The definition of partnership in purchasing and supply chain management, it is known as a relationship between two independent entities in supply channels to achieve specific objectives and benefits. In other definition, partnership also known as an agreement between two or more people to finance and operate a business.

    

         The first main point for the benefit of partnership is, it can improve the communication between the partner. With this partnership, the communication can be improve and it also can make both company bec   ome more close. Which is the bone between both parties become more solid and unbreakable. For an example, Gerimis Baiduri has made a partnership with Kentucky Fried Chicken, with a partnership made by both parties made the communication between them become improve.

          Next, another benefit of partnership is it can improve the quality. In this main point, we can see that by having the partnership the quality of the goods will improve. From this partnership, both companies can share their information about the product that are going to publish to the market so that the quality of the product can be advance to the better one. In the mean time, it also can make customer become more satisfy with the product.  For an example, partnership between Proton and Mitsubishi has produce an Inspira’s car that looks like Mitsubishi Lancer’s car.

         Furthermore, with the partnership, it also can make a good collaboration between companies. The companies will become more stronger when they have more partnership. When they have good relationship, it become more competitive to the wide world market in the global. It become an advantages to those companies who have a partnership. So, the customer will be more confident with the product made by company who has a good collaboration.

             For the conclusion, in this topic today, we have been told several benefits of partnership. There are improve the communication, improve quality and also make a good collaboration. However, they have another more benefits of partnership. So, what we can want to stress more in this topic is with having a partnership, we can have strong relationship and strong bone. It is not waste to have a better relationship by having a partnership.

Make Versus Buy

Bismillahirrahmanirrahim ……

Assalamualaikum w.b.t

How are you feel today?  have a great day today. In this era of Globalisation, there are many thing we want to do fast as possible. If  you have a company, you must have this 3M to achieve objective in business. This is Minimize Cost, Minimize Investment, Maximize Customer Service.If your company fulfil this 3M that can increase our profit. Today, we don’t want to talk all about 3M. We just want to talk about the first M. That mean, Minimize Cost. In business, Minimize cost is very important in business because if the product can fulfill customers requirement that mean our company was success in business. Customers not look at price, if customers satisfied they must buy it. That why, If we produce the product that can increase for the cost of production, that can effect for the price give to customer. To produce the product we must have a raw material to an sure the product can fulfil produce.In production, we have a two decision to get a raw material. That is we want to buy it or we want to make it.

Make Versus Buy

   

             Make or buy? This is a question of making decision to think about it. In today’s competitive environment, progressive firms must be able to produce quality products at reasonable prices. Product quality is a direct result of the production workforce and the suppliers. Buying organizations can be longer afford to maintain a large supplier base. In today’s competitive sourcing environment, buying firms select suppliers based on their capabilities, and not purely on the competitive process. The current trend in sourcing is to reduce the supplier base. In order to select suppliers who continually outperform the competition, suppliers must be carefully analysed and evaluated. That the reason why we need to buy or make.

The reason why must buy :

1.                             

                                        1.   Do not have the exact resource

2.                                 2.   Inadequate managerial / technical resource

3.                                 3.  Free management to deal which its core competition

4.                                 4.   Low labor cost

5.                                5.  Indequate capacity

6.                                6. Lack of knowledge

7.                                7. Save time

8.                                8.  Quantity discount

   

The reason why must making  :

1.      

                  1. Lower production cost

2.                               2. Unsuitable supplier

3.                               3. Ensure adequate supply

4.                               4. Maintainance core competence

5.                               5. Utilize surplus labor & facilities

6.                               6. Obtain desired quality

7.                               7 .Remove supply collusion

8.                               8.  Protect personal from lay off

9.                               9. Increase or maintain the size of company

                As can be seen, the make or buy decision is strategic , not merely a routine operational decision. The make or buy decision actually consists of a series of interrelated decisions that evolve over time. The make or buy decision must first determine what product or service is under consideration. The firm must then consider the in-house capability  for producing the product or service.

             If any constructive ideas can be added in the spaces comment below. Thank you for all response. Your cooperation is greatly appreciated.

THANK YOU for reads, 

OUTSOURCING PROCESS
Outsourcing is the complete transfer of a business process that has been traditionally operated and managed internally to an independently owned external service provider. A complete transfer means that the people, facilities, equipment, technology and other assets that no longer maintained internally once the business process is outsourced.
Outsourcing can be conceptualized as a process. So that, a company have to follow the steps or process that had been state before they wanted to outsource. So, below is the outsourcing process that should be followed.

       The first process that should be followed by an organization in outsourcing is strategic evaluation. Strategic evaluation process is the process that more towards why do we need to outsource. It also closely related to the make or buy decision. A discussion of the make or buy decision will be helpful in analyzing what may or may not be good strategic candidates for outsourcing. Strategic evaluation is also more towards the capabilities of resources. So that, we have to discuss whether to make or buy.
Second outsourcing process is financial evaluation. Financial evaluation process is based on implementation on operation cost. In this process, firms must evaluate on the potential outsourcing effort whether it can support the firms to make or only just to buy.

       Next process is supplier selection and contract development. In this process, firms have to know how to select supplier and make a contract with the supplier. To select the supplier, firms must identify and investigate the supplier first. To identify them for the buying firms, the supplier must compile their profile. In this profile, they should include such as key management contract, a company overview, SWOT (Strength, Weaknesses, Opportunities, Threats) analysis, Porter’s five key financial figures and much more. For the contract, it must be an enforceable contract. There are a few contents must have in the contract such the following components:

• A clearly scope of work
• Agreement between two parties
• Understanding of the contract contents
• Consideration for extensions and renegotiations
• Ground rules that encourages relationship
• Measuring performances for each aspect of the agreement is determined

       The forth outsourcing process is transition to the external sourcing model. The process is based on the implementation effort beginning with the contract execution to the transfer of the agreed-upon activities and resources. That’s mean the relationship between manager and supplier must merge their independent plans into one consensus plan. Consensus plan must include these:

• Communication criteria
• Personnel criteria
• Transition criteria

       The last outsourcing process is relationship management. In this process, firm must decide whether to continue the relation with the supplier or not. If the firms still need the supplier, they can proceed with the relationship and make a new contract with them. In this process also, the firms should be active in monitoring and evaluating performance and solving problems.

Global Sourcing

         Global Sourcing is a procurement strategy in which a business seeks to find the most cost efficient location for manufacturing a product even if the location is in a foreign country. For example, if a toy manufacturer finds that manufacturing and delivery cost are lower in a foreign country due to lower wages of foreign employees, the company might close the domestics factory and use a foreign manufacturer. See also outsourcing, international procurement organization(IPO)

         Common examples of globally sourced products or services include: labor-intensive manufactured products produced using low-cost Chinese labor, IT work performed by low-cost programmers in India and Eastern Europe. While these examples are examples of Low-cost country sourcing, global sourcing is not limited to low-cost countries.
        Majority of companies today strive to harness the potential of global sourcing in reducing cost. Hence it is commonly found that global sourcing initiatives and programs form an integral part of the strategic sourcing plan and procurement strategy of many multinational company.
       Global sourcing is often associated with a centralized procurement strategy for a multinational, wherein a central buying organization seeks economies of scale through corporate-wide standardization and bench marking. A definition focused on this aspect of global sourcing is: "proactively integrating and coordinating common items and materials, processes, designs, technologies, and suppliers across worldwide purchasing.
       The global sourcing of goods and services has advantages and disadvantages that can go beyond low cost. Some advantages of global sourcing, beyond low cost, include:

•  learning how to do business in a potential market,
•  tapping into skills or resources unavailable domestically,
•  developing alternate supplier/vendor sources to stimulate competition, 
• increasing total supply capacity.

 Some key disadvantages of global sourcing can include: 

• hidden costs associated with different cultures and time zones, 
• exposure to financial and political risks in countries with (often) emerging economies,
• increased risk of the loss of intellectual property, 
• increased monitoring costs relative to domestic supply. 

For manufactured goods, some key disadvantages include 

• long lead times,
• the risk of port shutdowns interrupting supply,
• the difficulty of monitoring product quality. 

       International procurement organizations (or IPOs) may be an element of the global sourcing strategy for a firm. These procurement organizations take primary responsibility for identifying and developing key suppliers across sourcing categories and help satisfy periodic sourcing requirements of the parent organization. Such setups help provide focus in country-based sourcing efforts. Particularly in the case of large and complex countries, such as China, where a range of sub-markets exist and suppliers span the entire value chain of a product/commodity, such IPOs provide essential on-the-ground information.

         Over time, these IPOs may grow up to be complete procurement organizations in their own right, with fully engaged category experts and quality assurance teams. It is therefore important for firms to clearly define an integration and scale-up plan for the IPO

Strategic Outsourcing

Assalamualaikum w.b.t

         Today we want talk about the strategic outsourcing in one company. Outsourcing can be defined as the complete transfer of a business process that has been traditionally operated and managed internally to an independently owned external service provider. Complete transfer means that the people, facilities, equipment, technology and other assets are no longer maintained internally once the business process is outsourced. Then outsourcing also sometimes thought to be similar to subcontracting, joint venturing and contract manufacturing. Outsourcing consider, firms are evaluating whether or not to reverse a prior decision to make. Outsourcing reshapes a firm’s boundaries.

Why the organizations do outsourcing business process? Lower operational and labor costs are among the primary reasons why companies choose to outsource. When properly executed it has a defining impact on a company’s revenue recognition and can deliver significant. Some generic strategic benefits of outsourcing are:

1.       Cost minimization

-          Accomplished by reducing direct operating costs, eliminating overhead costs and transforming fixed costs into variable costs.

2.     Refocusing the organization to its core competencies

-          Accomplished by focusing what the organization does best and/or transforming the business to focus on new products and services.

3.       Improvement in operating performance

-          Increasing quality, increasing productivity and obtaining new capabilities technologies from external sources.

4.       Increased market share and revenue

-          Assessing the providers’ network and accelerating expansion into new markets.

Specific benefits of outsourcing:

1.       Reduce and control operating costs.

2.       Improve quality.

3.       Change company focus.

4.       Acquire external capabilities.

5.       Refocus scarce resources for alternative uses.

6.       Reduce cycle time.

7.       Obtain cash infusion.

8.       Reduce risks.

The element of startegic outsourcing is 5 steps. It is:

1.       Strategic evaluation.

2.       Financial evaluation.

3.       Supplier selection and sourcing model.

4.       Managing relationships.

These steps can and should be modified to fit the spesific organization and outsourcing objectives. This steps is important in order to achieve continuous improvement and communication between the required outsourcing activities. The strategic evaluation and financial evaluation is before the company outsource. Supplier selection and contracting is during outsource and transition to external sourcing model and managing relationships is after the company outsource.

First step is strategic evaluation. That is a discussion of the make-or-buy decision will be helpful in analyzing what may or may not be good strategic candidates for outsourcing. The make-or-buy decision is to understand the strategic importance(value) of the activity or system.

Second step is financial evaluation. That is critical to ensure that outsourcing makes short-term and long-term financial sense. Many cost are only relevant when considering international sourcing alternatives or are only pertinent when considering the outsourcing of manufacturing activity.

Third step is supplier selection and contract development. The supplier selection is identify and investigate a potential supplier is for the buying firm to compile supplier profiles for each potential supplier. Knowledgeable about all potential supplier and aware of how they are rated by each function within the buying firm. The buying organization should clearly establish expectations for the potential suppliers and discuss the scope of work and the appropriate pricing for the outsourcing activity. The contract development is key to effective governance of the relationship between the two independent firms.

Step four is transition to external sourcing model. The transition will be 3 criteria. That is:

1.       Communication criteria – how should the external initiatives be communicated to the affected and unaffected employees.?

2.       Personnel criteria – what packages will be offered to affected and unaffected employees.?

3.       Transition criteria – when will the activities and resources be moved to the supplying organization.?

The last step is relationships management. That is the organizations work together using their specialised resources innovatively to achieve goals and objectives. Then the organization should be active in monitoring and evaluating performance and solving problems.
   If any constructive ideas can be added in the spaces comment below.That all.