Optimization of Multi-Period Rail Procurement Plan

Rail is one of the most expensive assets in railway infrastructure. Therefore, a well-prepared rail procurement plan could benefit the asset management. For the metro system in Taiwan, the rail procurement plan includes two major uncertainties, namely, currency rates and the global steel price. In this study, we propose deterministic and stochastic optimization models using a scenario-generation process to minimize the expected cost of the rail procurement plan. Results from the case studies demonstrate that the proposed models can successfully incorporate the uncertainties and obtain the optimal procurement plan. The sensitivity analysis on budget, storage capacity, and expiration period also provides the metro operator the best strategy to further lower the procurement cost. Adopting these models in rail procurement planning can improve the process and results of rail asset management.

Procurement Risk Framework: Guidance Note on Procurement

This guidance note describes ADB’s procurement risk framework for managing procurement risk throughout the procurement cycle. Effective risk management minimizes impacts on project objectives from adverse events. The guidance note describes how risks are identified, assessed, and managed at the country and sector/agency levels, and how those risks are used as inputs into the identification, assessment, and management of risk at the project level during procurement planning and through contract implementation.

Strategic Procurement Planning: Guidance Note on Procurement

This guidance note aims to assist borrowers in developing a procurement strategy and procurement plan for projects financed in whole or in part by an ADB loan or grant, or by ADB-administered funds. Effective and strategic procurement planning helps ensure that fit-for-purpose procurement approaches are developed to achieve value for money and the project’s development objectives. The note enables borrowers to take a flexible approach to developing a procurement strategy and procurement plan, applying tools and techniques widely used across public and private sector organizations to provide the necessary intelligence to make sound procurement decisions.

Mass Customization and the “Parts-Procurement Planning Problem”

We study a new parts-procurement planning problem that is motivated by a global auto manufacturer (GAM) that practices mass customization. Because of the astronomically large number of producible configurations, forecasting their demand is impossible. Instead, firms forecast demand for options that constitute a vehicle. Requirements for many parts (up to 60%) are based on the combinations of options in a fully configured vehicle. The options’ forecast, however, does not map into a unique configuration-level forecast. As a result, the options’ forecast translates into ranges for many parts’ requirements. The combined ranges of a set of parts are not always equal to the sum of the component ranges; they may be less. Determining parts ranges is a large-scale NP-hard problem. Large ranges and inaccurate calculation of these ranges can result in excess inventories, shortages in inventories, and suboptimal flexibility levels. We model and analyze the problem of allocating parts to suppliers and accurately computing the ranges to minimize procurement costs arising because of ranges. The range costs are assumed to be convex increasing. We perform extensive numerical analysis using a large set of randomly generated instances as well as eight industrial instances received from GAM to establish the quality of our approximation framework. Our proposed approach significantly reduces the error in range estimates relative to current industry practice. In addition, the proposed approach for allocations of parts to suppliers reduces joint-parts ranges by an average of 29.87% relative to that of current practice. This paper was accepted by Jeannette Song, operations management.

An Optimized System to Reduce Procurement Risks and Stock-Outs: A Simulation Case Study for a Component Manufacturer

In the current global system; supply chains are at risk due to increasing procurement shortages, supply disruptions, and the reliability of on-time deliveries with the original order quantities. As a result, an anticipated management model is of vital importance to provide companies with the productive flexibility necessary to adapt quickly to supply changes, in order to ensure the quality and delivery time through efficient management of stocks and supply costs. In this context, this research aims to develop a system to complement classical procurement planning based on inventory management methods and MRP (material requirements planning) systems by considering suppliers’ behavior regarding procurement risks. For this purpose, a system is developed that seeks to simulate the impacts of procurement shortages of different natures. Moreover, the research investigates the development of a system that performs procurement planning of a component manufacturer to determine the supply orders necessary to meet the master production schedule. The system is analyzed based on a set of indicators in the event that the supplier of a material needed for production does not supply on time or has short-term problems. Several scenarios are simulated, and the results are quantified by changing the procurement order quantities, which may or may not follow the economic order quantity (EOQ) model, and the potential procurement disruptions or shortages. The results show how the simulation and anticipation of potential suppliers’ procurement behavior concerning potential shortages and their probability are key for successful procurement within a joint strategy with classical procurement methods.

Factors Influencing Annual Procurement Planning of Medicines and Medical Supplies in Public Health Facilities in Kampala District

BackgroundDespite significant progress made by many countries towards meeting the millennium development goals and now sustainable development goals, there has been little improvement in access to essential medicines in developing countries.ObjectivesThe main aim of this study is to assess the factors influencing annual procurement planning of medicines and medical supplies in the public health facilities in Kampala district.MethodsThis study targeted respondents from government Health facilities in Kampala with a total population of 424 employees and applied simple random sampling to select 206 health workers. The researcher adopted mixed research approach with application of descriptive statistics, correlational and explanatory research designs that were used to maximize reliability and validity of findings. While the qualitative data was gathered through reviewing logistics tools, a physical count of the 30% purposively selected stock cards and interview of the staffs was carried out in health facilities in Kampala district, a Statistical Package for Social Science (SPSS) version 20 was used to analyze the quantitative data. Accordingly, a chi-square was used to determine the association between independent and dependent variables.ResultsThe findings indicated that 37.8% of the staff responded positively about the availability of annual procurement plan while the rest were from various health facilities. A significant association was observed between knowledge and availability of annual Procurement planning (X2 = 34.7; p value =.0001), as well as management support and Annual Procurement Planning (X2 = 9.87; P value = .008).ConclusionIn conclusion, the finding generated from analysis of quantitative and qualitative data revealed that a majority of the factors influencing annual procurement planning had a positive effect on medical supplies in public health facilities in Uganda although the capacity and capability of health workers, quality of logistics management information systems, and management support desires improvement. Rwanda J Med Health Sci 2021;4(2): 292-309

Public procurement planning as an immunity to the budget process

The subject of the article is the research of public procurement in the context of budget expenditures efficiency.The purpose of the article is to confirm or disprove hypothesis that public procurement planning is the basis of a strategic relationship with the budget process. Their symbiosis can minimize any negative manifestations of a financial, economic and socio-political nature, including the consequences of crisis situations such as a pandemic.The methodology. The authors analyze many Russian and western scientific articles and monographs from the point of view of the budget process and planning of public procurement.The main results, scope of application. Planning of public procurement should be considered not as a separate need of one specific customer or a separate group of customers, but as a set of public consumption of all possible and necessary resources. The opposite approach will inevitably lead to additional budget costs for the elimination of consequences (natural, technological, etc.), associated, first of all, with the lack of a proper and clear understanding of the essence of planning public procurement and public demand for goods, works, services). Proper and carefully balanced procurement planning for all public needs not only ensures the immunity of the budget process for the current and subsequent periods, but also constitutes the basis for the prospective rational use of renewable and non-renewable resources, both internal (national) and external (foreign). This article has significant scientific and practical value. The study focuses on the key problem of public procurement in Russia-the lack of interaction between procurement planning and the budget process, pointing to the identified shortcomings of legal regulation that do not allow to quickly adapt to situational changes from outside. It is proposed to consider the introduction of strategic procurement planning for 5-10 years, which will not only determine the basis for financing public procurement from the budget, but also predict the revenues of the relevant budget, more accurately and correctly prioritize funding needs.The findings of the study allowed the authors to formulate proposals and recommendations. Consideration of the planning of public procurement, taking into account the budgetary process, will make it possible to develop recommendations in terms of adjusting certain norms of Law No. 44-FZ, which would allow the most efficient use of budget funds, both planned in advance and urgent purchases.Conclusions. A global crisis reveals the most pressing problems of governance of any state. The crisis obliges the government of any country to promptly analyze and rebuild the regulatory framework for effective financial, economic, social and political management. De-spite numerous reforms the budget process in the Russian Federation has retained significant bureaucratic costs that do not allow for rapid delivery of budget funds to each customer. The urgent need for rapid reallocation of budget funds for additional and priority purchases has shown the imperfection of the legal regulation of public procurement planning, which should be radically restructured. Since public procurement planning as an integral part of budget expenditure is not actually related to its revenues, such planning should be carried out based on the customer's needs for goods, works, and services for a longer period, which will allow a more meaningful and responsible approach to the issue of effective budget spending and overall resource consumption. Digital technologies in public procurement planning allow you to quickly compare all items of the plan with those planned and completed earlier in order to avoid duplication (unjustified repetition) of a similar purchase. Planning of budget purchases is not only an effective expenditure of budget funds, but also an efficient (lean) consumption of resources, including non-renewable ones.

Incorporating data quality into a multi-product procurement planning under risk

Purpose In the data-driven era, the quality of the data exchanged between suppliers and buyer can enhance the buyer’s ability to appropriately cope with the risks and uncertainties associated with raw material purchasing. This paper aims to address the issue of supplier selection and purchasing planning considering the quality of data by benefiting from suppliers’ synergistic effects. Design/methodology/approach An approach is proposed to measure data visibility’s total value using a multi-stage algorithm. A multi-objective mathematical optimization model is then developed to determine the optimal integrated purchasing plan in a multi-product setting under risk. The model contemplates three essential objective functions, i.e. maximizing total data quality and quantity level, minimizing purchasing risks and minimizing total costs. Findings With emerging competitive areas, in the presence of industry 4.0, internet of things and big data, high data quality can improve the process of supply chain decision-making. This paper supports the managers for the procurement planning of modern organizations under risk and thus provides an in-depth understanding for the enterprises having the readiness for industry 4.0 transformation. Originality/value Various data quality attributes are comprehensively subjected to deeper analysis. An applicable procedure is proposed to determine the total value of data quality and quantity required for supplier selection. Besides, a novel multi-objective optimization model is developed to determine the purchasing plan under risk.