Biz With Liz - Better Buying
Biz With Liz - Better Buying
Biz With Liz - Better Buying
IG HT
7 th No Biz with
vemb
e r 2 01 Liz
6
Savings
tsh
Sell
The
Mak
Plan Business
Process e
Buy
Business flow
Mak
Plan Buy Sell
e
• The exact specification
• The best place
• The best price
• Best buying Unit
• Best Transport costs
• Relationship trusted
• Reliable source
• Consistent quality
• Best terms
• Best internal processes
• Best timing
• Most suitable equipment
• Most suitable staff
Best Value
Use Buying Skills
3
You need to LIKE Buying WELL
24
Sold
week 4
Buying activity
Making depends on Selling depends on
Selling activity
24
Made
week 5
Good Raw Material
Management
Good Production
Order System
Good Stock
Management
= a PULL
SYSTEM
Good Raw Gro
Kan und
Material b an n u t
car
Management d
200
Good Production Kan kg P
b an B
Order System ca r
d
• Reduces waste
• Increases efficiencies for work on progress
• Creates transparency
How to make a PULL system
1. Set your Minimum stock holding Trigger point
– Per every product you sell
– Per every raw material you hold
buying unit =5
Min 4
Import Supply chain
Small
retailer
Large retailer
Small
retailer
Wholesaler Large
Arusha retailer
wholesaler Large
Wholesaler
Dar retailer
African mwanza
Importer Wholesaler
Import Iringa
Agent Wholesaler
Mbaya
Buyer, distributor
Producer
OVERSEAS Supply chain Gets 1 apple
1 m.ton = 1,000 kg= $600 metric ton Gets $52.44 1,000tsh
$30.00 46c
2254 x10kg ctns per container Crtn You
=22.54 tons -$600X22.54=$13,524 cont price Gets
Gets $20.00 26c
$13,524/2254= $6.00 crtn $26,500
$6.00 carton (23X5=114 apples ctn) Crtn
Container 17c
$6.00/114=$0.052per apple $11.75 Small
Gets retailer
crtn/10c
$24,000 Street
Container Large retailer seller
Gets
$18,500 $0.093
Small
Container Wholesaler Large
Gets retailer
$0.072 Arusha retailer
$16,000
Gets Container wholesaler Large
Wholesaler
=$0.062 Dar retailer
$600 East Africa Mwanza
M.Ton Importer Wholesaler
=$0.052 Foreign Iringa
Agent Wholesaler
Mbaya
Buyer, agent
Apples Export packer
Grower
Do you have a SHELF LIFE CONSTRAINT?
2
Material Stock SHELF LIFE
Shelf Life Use per
# days, weeks Day/week
Item Purchased Months, years /Month Minimum stock Maximum stock Special handing? Risk?
Diamond Plastic Nabraska
Pipe condition
Pipe Journey ?
1. Oil production
2. Onto truck
3. Truck to depot
4. Crane large truck
5. Truck to Plastic plant
6. Off load Plastic plant
7. Make plastic, Make pipe
8. Label and brand
9. Pack container
10. Container to wharf
11. Truck to exporter
12. Crane onto Ship
13. Ship to Panama Red sea
14. Transfer and ship to Dar
15. Crane off ship
16. Truck to Al Jazeera
17. Truck to w.sale w.house
18. Truck to large shop
19. Truck to small shop
20. We buy
Price Large
wholesaler Wholesaler
retailer
Dar Mwanza
Price E. African
Importer Wholesaler
Iringa
Overseas Wholesaler
Agent Mbeya
Buyer
Maker
Buying unit Buying unit Buying unit Buying unit Buying unit Buying unit
40,000 hoses 15,000 2,000 50 hoses 10 1
Income Income Income Income Income
20,000,000 15,000,000 6,000,000 175,000 70,000
(500tsh per H) (1,000tsh H) (3,000tsh H) 1 hose
525,000
25,000tsh
Price Suzie
Price Price Price Price
10,000tsh 10,500tsh 14,500tsh
11,500tsh 18,000tsh
5 hoses
25,000tsh
each
Not Twende
Wholesaler Large Small
East African Wholesaler retailer
Dar Arusha retailer
Distributer 1 hose
25,000tsh
Ted
1 hose
Note -Income per hose pipe depends 25,000tsh
on volume of business Freddy
Business priority
Buying unit Big District Distributor
15,000
Hoses
Material + Making Cost + Handling Cost + Handling Cost + Handling+ Service Final consumer
20 + 15 35+ 5 40 + 20 60 + 40 100
Inefficient volume – methods?
Materials Cost + Handling Cost + making Cost + Handling+ Service Final consumer
20 20 + 5 25 + 45 70 + 40 110
Adding VALUE to a SUPPLY chain =
Answer
You negotiate very good value,
- e.g. good price, good payment terms, good buy unit
Better value than your competitor is getting
- eg, fresher, sweeter, riper, bigger, less contaminated, better brand
Suits your business
- e.g, convenient, style, business like minded, speed, service
You have found a good supplier that your competitors have not
• Make your target buying Price list, per best buying unit
• Take your best price list - don’t buy unless lower price
• Ask for lower prices - negotiate-e.g lower price if you buy more-please
TAXI
Do you hire taxi
for delivery?
FARE $?
How
much
Do you use you Every Buying trip ?
BUY
$? does it How often do you go?
own car? FUEL
COST
YOU?
Does your supplier Higher
prices? $? $
deliver to you?
Is the Supplier really the best?
Do not follow the crowd or your nose
Production
1. Schedule staff to fit the expected sales rate, e. 2 days a week on this product
2. If sales slow reduce output, respond daily
3. Keep stock within these figures, by changing daily production plan
4. Keep sales history posted on wall for all to see, update more than weekly
Best price
• Know all suppliers prices for everything
- Keep a file and update often
• Calculate, check, calculate and calculate- the best deals -use your phone
• Say "NO" when it’s the wrong price (not the best)
Price $160
Price $33.00
X In one year a
difference of
$3,072
DECREASE COSTS – Smart Buying