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NAME: RAMESH A/L SUPPIAH STUDENT ID: 071110236 TUTOR MARK ASSIGNMENT 1 INVENTORY MANAGEMENT

Part A Question 1 Involving the suppliers at the early stages can lead to development in procedure, design, reshape or worth investigation activities. Subsequently cut cycle time, progress competitiveness as well as decrease expenditure compels countless organisation to form suppliers on a set of people by diverse practical knowledge functioning toward a common aim. It includes persons starting from finance, marketing, operations, and personal departments. Characteristically, it includes workforce from all levels of an organization. As for Veroxide Group it is vital for them since they involve in pharmaceutical business. Gardner's might take part by expecting of securing the dealing, otherwise because of the in progress joint venture/coalition bond. In private issues normally will be dealt direct, moreover it have to be lucid to the supplier whether participation guarantees the dealing. Bring an innovative pharmaceutical product to market can be a difficult mission, except it can be particularly when it involves complicated feed stocks, Thats why its significant to know each pace of the procedure and apply arrangement and mistake as of the very early. Suppliers play a vital place within each pharmaceutical OEMs industrialized development. Smart ones take care of their suppliers as their partners and less similar to vendors, beside working closely with main suppliers early in the process, they can create more value, improve quality, and reduce overall time to market for even the most difficult or critical feedstock. For an instance in the case of the Veroxide Group and Gardners, they are working very closely where it has been proved in the case Gardners has always meet the criteria of the by supplying the feedstock and special chemical 'Onulon' without fail for the R&D units for five years. This will lead to improvement in all over process from research until marketing the finish product. Early supplier involvement (ESI) in the growth series and furthermost method to control expenditure as make the most of the return from make use of suppliers specific talent. Near the beginning in the procedure and focal point on the required results, a OEM can quickly embark upon each potentially tacky matter, and force out needless costs early on support innovation, and by improve organization. Without ESI, a company runs the peril of without increase the overall growth cycle, raising the figure of design revisions later in the course, and eventually end up with a product that is too complicated, too costly, or too hard to produce. While a new invention is intend and specified, decisions must be finalised about the widen issues and the time of supplier participation .As there are likely disadvantages related with suppliers involvement within specification writing, close by are many would-be benefits . But if there is participation, then the earlier the healthier is the law, since the further a design proceeds, less the chance to manipulate it The possible disadvantages of early supplier involvement are; suppliers develops a satisfied view as favoured source so there will be no any hardworking or initiatives from their side. For example in Gardner's prospective they didn't have any initiative to train their workforce.
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This will eventually will lead to comfort zone for the Gardner's Limited. Followed by risk of leak of business or mechanical classified information. As an example this leakage can put the Gardner's Limited in vulnerable position. Since the information can be passed thru various unofficial channels that might beyond their control .Rivalry may be extinguished, in this scenario the competition for Gardner's Limited to secure the business get rid of and at the same time Veroxide Group lost out in selecting another competitor since its binding with contract and invest in the process. Not only that potential innovation from other source maybe unprocurable. Despite the issues, there are many possible benefits to the purchasing concern if the supplier enter at an early stage. A basic evaluation is the supplier will, in all chances , be the specialist in the affiliation, knowing a superior agreement more than the purchaser does about the technical and business aspects of the high-quality service in question. From this position, Veroxide Group capable to recommend on the method of manufacture, material availabilities, alternate technologies, alternate materials, method of manufacturing and supply, predicted material cost, sources of manufacturing capabilities, extent of competing demand for parts, and information on patents, copy rights. There are issues linked by the association among purchaser and seller that persuades , and acted upon by , early supplier involvement pertaining supplier ordain be part of the customer group and the first value stream and supply chain philosophies need a close adherence between organisation This binding requires joint participation. Early involvement of and association among supply function , supplier and design team involves the subsequent stages. Describe the pertinent stake holders in the plan and development activities such as engineering, production ,marketing, finance ,supply department, suppliers. Arrange cross functional activities among pertinent in-house stake holders to study such issue as commercial feasibility, technical feasibility , time condition , quality issue, customer needs and so on. Engage outside stake holders, together with trustworthy suppliers working with them relating issue and the product development. Engage outside stake holders, together with trustworthy suppliers working with them relating issue and the product development. Work jointly judge the growth of information system and the likely use e commerce approaches so that planning, scheduling and delivery of materials can be fit in by the customers assemble or manufacturing plan. The strength of Veroxide Group is , they are one of the high quality since it's a pharmaceutical product manufacturer. As we know medicine is related health and is always a crucial issue related to human lives. Veroxide Group also facing a less competition in market globally where there is minimal players globally. This is caused by rigid guidelines set by the authority to enter to this market and must meet the set need by the respective bodies. Furthermore the location of the Veroxide Group's give them the strength indirectly, The close proximity of Veroxide's Manufacturing unit in Johor, Malaysia and its R&D unit in Singapore is just a causeway connected. Johor is connected to Singapore thru two road links: the Johor-Singapore Causeway and the Malaysia-Singapore Second Link. The two units country share the same culture and language is not a barrier which can help in solving most simple problem like communication. Not only that, the total production cost of Veroxide Group in overall can be competitive since the manufacturing cost in Malaysia in not greater than Singapore. By having the production plant the Veroxide Group is manufacturing with cost effective. When talk about Gardner's, the Veroxide Group is also at winning side since the location of Gardner's is in Batam, Indonesia. Batam is an island and town in Riau
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Islands Province of Indonesia, known for its free trade zone area as part is located 20 km (12.5 miles) off Singapore's south coast. In this case the Manufacturing plant, R&D unit is see its preference in terms of logistic but also in material availability. For an example, the lead time for the Veroxide Group to units to get the feedstock and run the production it's not an obstacle. Since the R&D unit can do a procurement and the supplier from Batam can send the goods thru sea cargo to Singapore or Johor and the Johor plant can start the production in a short lead time compare to other region or country reliability on feedstock. Batam, Indonesia is not only help in terms of proximity but also cost in the sense cheap supply commenting on economic and attractive currency value. In average person terms we refer it as cheap and very good price (currency exchange) the three countries (Malaysia, Singapore, Indonesia) are bound with AFTA agreement which they able to in tax exemption for certain goods . As for the Veroxide Group they have another competitive in producing the product in the most cost efficient way since they can have cost control per unit since they are a manufacturer and not a trader. The Veroxide Group also very strong in their research and development skill since they have their own buying unit and can follow suit to compete with their competitors with introducing a new product in market by using their R&D expertise skills. Financial background for Veroxide Group is very strong and they able set a high budget for R&D unit, the buying unit in R&D is different from the head quarters in Hong Kong where its stated. The planning team of Veroxide Group is also playing a vital role which add in the competitive advantage to the company product. As quoted ''to meet the forecasted production scheme, 2 tonnes ....will be required every three months''. So since they do order and receive from Gardner for the past five years without fail , the credit should also goes to the planning unit. Gardner is not only has its own geographical advantages or competitiveness towards Veroxide Group Singapore and Johor but also I can classified Gardner as a good and reliable supplier by impeccable delivery and its quality performance. On the previous page I state all the strength of the Veroxide Group and its supplier Gardner's strength but now I'm going to elaborate on the weaknesses. Since the Veroxide Group operation involve four countries namely (Hong Kong) China, Malaysia, Indonesia, and Singapore, the best obstacle or weakness is difference of government policies. Each of the above mention countries have their own law to protect their country interest in terms of trade and taxation, but there is something beyond that such as if new government take charge the old agreement between the countries could be reviewed and possibly affected. Diplomatic relation jeopardise if some conflict arise from external or internal pressure due to various reason. Other than that, the bureaucracy and different public holidays would largely will affect the process ad become the weakness.

Pharmaceutical companies are similar to other companies in that they produce goods that have sold for a yield in order for the company to survive and develop. They are different from some companies because the pharmaceutical business is very risky. For example, only one out of every ten thousand revealed compounds in fact becomes a permitted drug for sale. A great deal cost in the early stages of development of compounds that will not become approved drugs. In addition, it takes about 5 to 8 years and only 2 out of every 10 approved
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drugs bring in adequate revenue to cover their developmental costs, and only 1 out of every 3 approved drugs generates enough money to cover the development costs of earlier failures. This means that for a drug company to survive, it needs to discover a billion-dollar drug every few years. Cost of Innovation is second biggest weakness for companies like Veroxide Group. A huge sum of capital need to be injected before a research being done and the success of the product or outcome is still in the doubt or maybe in risk. The huge amount being invested in Veroxide Group may be run on hundreds of millions, and may seek the help of government for tax exemption but it still under the government's discretion. The Veroxide Group R&D spending rose 3.9% shows that every year they are spending more. Time frame/ Lead time for the research period is unknown, that means all the outcome is not guaranteed on its success. Government appointed medical institutions or boards. Each country has set up its own agency to evaluate and approve the new drug. Here are the list as example: European Medicines Agency (EMEA) Therapeutic Goods Administration (Australia) (TGA) U.S. Food and Drug Administration (FDA) Ministry of Health, Labour and Welfare (Japan) Medicines and Healthcare products Regulatory Agency (MHRA) Central Drugs Standards Control Organisation (India) (CDSCO) Ukrainian Drug Registration Agency

Larger feedstock needed for the production Zentonex. Since Onolun is a special chemical. Veroxide Group need a supplier one more extra because there is only one reliable supplier very lucid for Veroxide Group if the Gardner is no more in business. The buying unit or procurement is not centralised in Veroxide Group, for instance the Hong Kong headquarters is no more in charge of R&D buying unit in Singapore. If Hong Kong headquarters would shift its operation to Singapore or Malaysia or otherwise centralised the procurement would be more cost-effective. For Gardner Limited is a small company compare with Veroxide Group since its has only one manufacturing plant in Batam, Indonesia. While Veroxide Group has one head quarters, one manufacturing plant, one R&D centre. Gardner Limited financial background is not par with Veroxide Group since its taking a bank draft to invest RM 1.5 million and Gardner Limited has not planned this expenditure.

Question 2 Mainly average to big size companies encompass supplier development programs in place; a lot of of these programs are not being executed. Supplier development is a different plan for upgrading, is an action undertaken by a purchaser to develop a suppliers performance or capabilities to meet the purchasers short period and long period supply requirements. Companies depends in an assortment of activities to develop supplier performance, together with sharing technology, providing incentives to supplier for improved performance, promoting competition among suppliers, providing necessary funds and directly involving its personnel with suppliers thru activities such as training and process improvement. Straight participation in a suppliers operations by purchaser personal is certainly the challenging element intended for one supplier development procedure. Organization attitudes considerably influence the achievement of the supplier development task. Not only key organization people to be persuaded for investing but external supplier operation is a valuable commitment, the supplier organization have to be persuaded for its own importance to accept direction and aid. Suppliers are from time to time hesitate to accept external assist because they are not too swollen with pride to accepting the aid or since they do not see the worth within getting better quality or delivery performance. Also frequently , the suppliers believes that the merely a purchaser needs to slot in the supplier development is to force the supplier to go by along the cost reduction. Triumphant suppliers development need a strong, bonding affiliation and joint dedication among the parties. Even if mutual understanding of the importance of supplier development is reached, there is still the issue of execution and allotment of essential resources by both parties, as well as that the execution is uphold eventually. The achievement of the proposal requires the commitment of monetary funds , person resources, expert workers, suitable and precise information sharing and performance capacity. Not all companies requires supplier development programme, there is a lot of steps to take into consideration. A basic process for move a supplier development initiative are as follow:1) Choosing criteria equipment or mechanism based on given task approach/investigation such as kraljic matrix. Kraljic has each supplier as one axis, and susceptibility to their failure or disappearance as the other. The former has the great advantage of being objectively measurable, while the latter is a matter of judgment. The model generates four categories of supplier Acquisition Security Profit Critical

This model very useful in all sorts of Purchasing issues. It particularly helpful in planned risk management, because after all one axis is specifically about risk. Not only that, but using the Matrix helps develop appropriately tailored bidding and negotiation 2) Select critical suppliers based on supplier performance and capability. This is all about the supplier standard do they have following all the rules and regulations set by the government, environment friendly , code of conduct and other external and internal issue. 3) Form a cross-functional team from related departments. The group of people with different functional expertise working toward a common goal It may include people from finance, marketing, operations, and human resources departments. Typically, it includes employees from all levels of an organization. Members may also come from outside an organization (in particular, from suppliers, key customers, or consultants). 4) Meeting with the top management of the selected suppliers. 5) Identify potential improvement opportunities. 6) Determine key metrics and mechanism for sharing of cost and benefits. 7) Finalise agreement on major projects and joint resource requirements. 8) Project monitoring and strategies modifications.

In brief, realising a competitive advantage from the supply chain requires the position of purchasing management objectives by business unit goals. Suppliers development plays an important position in create sustainable competitive advantage as aligning purchasing management and business goals. As well developing joint faith, the participants within a supply chain can start to really appreciate every other's wants and requirements, thus construction the whole supply chain stronger and more competitive. pursuing efficient growth activities requires visualization, dedication, unlock messages and reasonable sharing of costs and benefits. the Long-term objectives, of course, is to change supplier's traditions and chromosome. Such joint accomplishments are achieved longitudinally and only by those companies that are patient and tenacious enough to make supplier development an important part of their supplier management processes.

For the case of the Gardners Limited I would like to recommend to provides essential capital and directly involving its personal thru activities such as training and procedure upgrading. The reason I'm suggesting this to the Gardners Limited because the buying is done by an untrained buyer. This is show that they might have some problem with the qualification standard of the work force and this may be due to least education quality standard . Subsequently Gardners Limited financial is not that strong to invest in RM 1.5 million. From here, Veroxide Group can help to inject some capital to help the supplier by not taking bank draft which will help ease Gardners Limited financial burden when they did not planed the expenditure. This action will defer Gardners Limited from exercising the bank draft plan. Gardners Limited are strong in the sense of their supplier; where they have three suppliers for feedstock for Onolun chemical and these suppler can manufacture in the quantity and quality standard with comprising on this issue. Their quality management is excellent and I have confidence in this aspect This activity or action may bring the Veroxide Group and Gardners Limited together more closer than before by creating a sense of togetherness and loyalty. Veroxide Group also can help to develop Gardners Limited by investing in sharing its technology. For an example let's say the Veroxide Group using a SAP, Electronic Data Interchange system , which is a live system to communicate and overcome its problems such as procurement , stock availability, delivery lead time, self lives on the spot or in short time compare to the old conventional style. This will enable the Veroxide Group ability to advice the untrained Gardners Limited workforce on their needs. Veroxide Group also can use this to give technical support, Improve overall Supply Chain Management function where Gardners Limited has identified it as a serious concern and major risk restricted shelf lives (seven week) and the supply chain management will be critical. By doing this both parties can lead to integrated system waste elimination where the is less wastage and support the environmental factors. The help also can be extended in the commissioning and installing the new facilities for the procurement side. The commissioning of the new facility must be check to have a good layout of the new installation and by providing technical support to the chief engineer and store manager. To signs a contract and to take part in supplier development programme as a sweetener Veroxide Group must give some in incentive to Gardners Limited. These incentive must be accountable for and legal. A good examples of incentive is having a special excursion for them. Participate them in all event that entertainment or activities for leisure organised in Veroxide Group.

PART B QUESTION 1

The general appraisal of managerial is in real meaning, a administration reassessment of the purchasing activities. The fundamental hypothesis of this assessment factors of controlling the departments capabilities as they are helpful mediator to indicate performance. Since the vulnerability is an issue of the evaluation, it's regularly can be executed most efficiently via someone exterior to the purchasing unit. Persons usually invited to conduct such critique, are private consultants, employees method expert, administration personnel and in-house staff auditors to improve in process Capacity of the procurement role elaborate importance of the management in consider the procurement activity in the company's whole process. This is where my company SMPC Cooperation Berhad has a great importance in terms of their end year financial report and allocating the budget for the company to spend for each department that particular year. For any company be it a small or big the procurement department playing a critical role in any organisation My position of procurement is properly located in the organisational hierarchy since our company deal with plastic strapping. manufacturing. As a manufacturing we have to adhere with our raw material suppliers rules and regulation. Market intelligence information plays a significant role in our company products manufacturing pattern. Our procurement is in the formulation of policies on forward buying, but it not under JIT technology or others but purely on forecasted sales which is generated by the sales team and market intelligence. We will always stock up 30% of raw material and 50 % of finished goods for forecasted manufacturing and our physically ready available stock for our customer. Assessment of purchasing executive personal; My company purchasing managers and executive are highly qualified with all posses at a degree from reputable universities from the United Kingdom and Singapore some of them even have PhD qualification in economics and business related course, most of these people have been working in the same industry for many years in foreign countries. Our engineering and technician teams are previously workers from a reputable company join here to share the expertise whom have been retrenched by then employers. They have a very broad knowledge in terms of technical and material We have a market intelligence teams which they pose a specialize skill of the suppliers and market information. The department is under the surveillance of the managing directors.

Our organisation purchasing activities is concentrated in purchasing unit in a separate and isolated building outside the manufacturing plant with 5km radius. There have been obvious outline of task and rights been established. We also have adequate authority delegated all along by tasks. The in force activities rationally grouped for reason of practical operation, adroitness and control. The department also developed sufficient work depiction and workers qualification for its work, the organisation plans to meet potential need in future from all aspect that mean its move along with political, environmental, social and technological issue. Such as we are the one first to know the information in the market before our competitors. All the department in our organisation have their own objectives but it will lead to one goal and to the success of the company Our organisation employees qualification as I mention before is have sufficient match jobs, before hiring they go thru a selection criteria process and later given on the job training for specific period. Other than that our human resources department will send the suitable employee which fall under their criteria and send them to have some seminar and other course under the HDRM scheme, for those with a degree and would like to upgrade themselves our company are willing to provide aid from financial other aspect. If we think during the probation period or after that, but within the specific period a employee doesn't show any progress our company will transfer them to other department to see whether the employee can progress or be improved under other superior . Our company always treat employees as their first assets, to retain them every end of the year incentives will be rewarded reasonably to each and every employees taking into consideration their progress and contribution. But then not forgetting their yearly increment. Policies and purchasing code of conduct which will be elaborated in the detail under the Question 2 (B). basically about the rules and conduct must be adhere by the personals and following the SOP rules. Referring to the (SOP) standard operating procedure, our company place a great importance and also rigid guidelines to strictly follow. Penalty will be raise for them not following the guidelines maybe to the disciplinary action extend. We use all the previous months and years data's to do an analysis and get some valuable information for us to keep competitive in market. Such as different supplier pricing, different quantity pricing, delivery time, ordering, monthly price changes, quality of delivery all this information is extracted to get to deal with supplier and compare their weakness; by helping them to be competitive alert and finally help our organisation to operate in economic scale. All policy have been clearly describe of its vision, mission and function to make sure the stakeholder adhere to the message and work together. Procedure is well develop and clearly state while linking all the departments on relevant issue so even there is some companies struggle with functional silos .We have break the barrier by stages of research when creating a form or something required to be done. All our record and reports are kept safe, update, and intact in our system for audit purpose and mainly to facilitate managerial control. Monthly stock movement reports will be send to management and need to justify the reason on low, high raw and finished good stock with the exact value. The data also serve as encrypted version for the records and control purpose.
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QUESTION 2 a) Purchasing social responsibility is all about keep up economic development in a balanced situation by not forgetting the small, less fortune, environmental factors, humanitarians grounds, charity and philanthropies. In this most of the organisation is talking about profit, yes its true without it you can't run a good organisation. But as a human we have responsibilities in lifelong relationship. It is the issue on how purchasing position among suppliers to meet societal responsibility in supplier side. We focus and give a chance for the minority group for them to meet an economical benefits to enhance their quality of life and be grown them self from small to medium. By doing this not only we are supplier but also potential loyal supplier in future and we believe they will help us when the need arise such as in bad economic situation for us. When they became bigger we also have a better competitive supplier. The minority group I'm mentioning here, where the supplier is in sole proprietor or small companies with three directors without gender, race, religion bias. We always follow the guideline of environmental safety issue by complying the ISO standard by our company. We insist to our supplier to only give us an eco friendly product in the line to save the earth and evade tax in Malaysia. The wastage from our company is at the minimal level and will be disposed according to the regulation set by the Department of Environment. This process may be expensive if you compare with just dump it but in long run we realise that we must play a part to protect the environment for our next generation and as our responsibility in corporate and citizen of this world. Incentive is given to selected supplier for them as a part of social responsibility and supplier development. We also use recycle plastic resin to produce a lower grade product which is usable for non heavy industry. We normally hesitate to have supplier who are not eco-friendly. Audits has been conducted quarterly for our side and supplier side as cross checking internally externally once a year. Our safety working condition are being watch under the supervision of two executive and one manager. The safety manager is accountable for any mistake or accident that take place within the premises; until today no such event occur in our company because of the strict rules and penalty being impose on workers whom do not comply the rules and regulation under the company safety act including termination. We always will hold fire drill activities once per month and hold a fifteen minutes break before start and before end each day. By doing this our company emphasis on safety issues without compromise. When we meet our supplier and in the line with developing our suppliers we always make sure our supplier also same suit with our regulation but fortunately they follow this system by having only one safety officer. We will send our safety manager to our supplier premises as a grooming and information sharing with suppliers on social responsibility. Since the culture they used too made my customer in Indonesia to follow the inefficient system to always have untoward incidents. For an example, they even don't have an official forklift licence and qualification to run the machine.

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The operation at our supplier facilities is getting better and better with ongoing programme development under social responsibility with suppliers, by such programmes their performance is now improving. Human rights issues is not bad in our company and our supplier companies as we are legally binding it to standard employment contracts. The labour law in Malaysia is very clear; all the contract is execute under labour and employment law. In the contract issues such as time of work start, break time, overtime pay, annual leave and etc has been clearly stated to avoid and confusion; child labour is an offense under the Malaysian labour law. Our supplier choice is based on the evaluation and qualification such as mostly environmental and labour issue. My customer whom are mostly in Indonesia does not enforcing the strict rule to the existing law made very hard to execute the law. Every year as token of appreciation to the society our company join with supplier will hold a charity dinner to donate certain amount of money approved by the management to the old folk home, orphanage centres as a philanthropic activities to evade the tax. Always we believe in incorporated social responsibility in the purchasing agreement with suppliers.

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QUESTION 2 b) If I'm the procurement manager, I will certainly reject the invention to a dinner in a luxury restaurant in a polite way. The reason is because I'm obligated to my company code of conduct. My organisation code of conduct is back up rules, an essential measurement to the fulfilment by my company's business code of conduct. But if the supplier insist on bringing me I shall offer him that it be my treat by getting an approval from my superior by doing this I will be escape myself to be obligated or thankful mind to the supplier whom may gain for his business interest and to my company and personal disadvantages. If I describe it in layman terms, it should be something like he already deliver me something very exclusive so in return i must do something. The feeling just like I owe him something. Another way is I can bring a big group of the cross functional teams to the restaurant but not alone. Because by doing this internal and external people also can have gossip or suspecting look that I'm some kind personal interest with the supplier. In other terms I may propose the supplier to host or monetary sponsor for certain amount for my company annual events. Worst come to worst i will ask him to buy a simple lunch at any place of his choice but not luxury. To avoid all this conflict it's the easy way to explain him about my companies code of conduct rules: Act truthfully and morally, I should hold out my duties in an sincere and principled method with ensuring that business policies and practices be aligned by moral values. Maintenance the secrecy of confidential information acquired in the course of work, I should act in good faith, responsible, with due care, capability and carefulness, not including allowing ones free decision to be subordinated. I also should give information so as to is factual and not intended to deceive. Obviously converse moral prospect, desist from appearing to use secret information acquired in the course of ones task for unprincipled or dishonest benefit either for myself or throughout third parties. Make sure the honesty of paperwork, including documenting obtained in a appropriate form.

Avoid conflict of interest, keep away from real or obvious conflicts of interest among individual and professional relationships. No activities must be engaged and welfare outside the organisation have to be avoided to make it hard to execute my company job impartially and efficiently. There should be none straight or not direct monetary interest in a supplier or competing company is allowed. Service to my company have never be rate to individual gain or benefit. No worker, his or her spouse, or a member of his or her family unit, may get indecent individual profit as a consequence of the employees position in my company. The receipt of offerings or individual favours of business-related assessment is not tolerable. It is to be clear to third parties that individual favours can merely manipulate the business relationship unenthusiastically and that business decisions are based exclusively on benefits to the company and not on considerations of earlier period or prospect individual gain. In
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broad, a present(the worth of which do not go beyond RM 100) might be acknowledged if agreed gladly and if close by is no sensible probability to it will manipulate my decision or activities in performing duties for my company. Personal monetary help of some type provided by a supplier or one more company contact, other than a monetary establishment acting in the normal way of business, is prohibited. Turnout at sport events, restaurants, bars, shows, etc. as the guest of a business contact is allowable merely upon obtain the superior's permission ahead and only if the hosting company delegate is there. journey and overnight lodgings paid for by a (possible) supplier is not authorised. Fulfil with appropriate laws, policy and rules, execute my duties in agreement with pertinent laws, policy and rules. pursue a reasonable procedure to choose suppliers and honour deal to suppliers hold up the code of fair contest seeing that a foundation for selecting suppliers and giving business to suppliers. Whilst considering the advantages of my company maintain a progressing relationship among the suppliers, keep away from any deal that possibly will, jeopardise in the long term, to avoid the effective request of reasonable competition. Fully fulfil the inner procurement procedure of procure requirements and purchase orders when giving business to a supplier. No procure done with no a purchase order. Not divulge information connected to bidding from suppliers with every other supplier at every occasion. Pay suppliers in line with my company rules; every payment for a companys manufactured goods or service have to be prepared to the corporation, not to a person. Cash payments are not allowed all payments have to be prepared to a bank account chosen in text. Just make payments to the supplier of merchandise or services received. Choose suppliers and give business to suppliers that are dedicated to act reasonably and with honesty to their stakeholders and that accordingly monitor the appropriate policy of the law of the countries they function in. End the relationship with suppliers that do not hold to broad-spectrum to my company policies for suppliers, akin to the child labour and forced labour policies Maintain a proper professional competence level make sure that professional competences and skills are maintained at a height that is reliable with the liability of their job. Be responsible for faithfulness to the Procurement Code; ensure that the rules of the Procurement Code are imposed on subordinates who be performing certain purchasing functions and that they are complete fully conscious of this responsibility Start administration action if and while a likely infringement of the policy of the procurement code is noted within my company. Reporting of violations; report to a greater official any clash of interest that might sensibly be accepted from any transaction or relationship.

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QUESTION 3 PART B There are a lot of different causes inventory management to be vital in this competitive world. Transformation in the marketplace demand , new chance due to universal marketing , international source of resources and recent manufacturing equipment means many corporation require to alter their Inventory Management approach and alter the procedure intended for Inventory Control. Knowing exact products have in stock, and the exactly quantities to be ordered. With no good inventory management, we may mistakenly order goods, and may keep it in store for a long time. Not in have to bid more, and have an in excess the store the over buying products, cost not only cash, but storage room. Good inventory management to let towards track the goods sold which help to find what items sell the most, what period of the year that extra are sold, patterns develop plan to analyze and purchasing so, track goods that not popular so either not order as much as would normally purchased or planned to stop. The correct inventory management software is just as significant. Nowadays, inventory has turn out to be smooth, with bar codes, scanning devices, and computers, software needed that keeps up with the latest technology. by using this software if you are running out of something, no need to call the warehouse to find out. Inventory management is very important to these days trades, particularly in the retail market. In order to stay up with sales, trends, and reputation of some product, or row of products, the merely method by tracking sales data, from time to time of the year. Products are losing ground can be consider or to take it off the shelve. By doing this competition keep up, order the correct quantity at the correct period and find whether to get rid of goods that low in sales, cutback space, period, and cash. There are profusion of kinds of inventory management software obtainable in the marketplace. Not all software is the similar, in fact have to get the time and make sure that it is correct for requirements. Providing information to economically handle the stream of resources , efficiently use individuals and tools , organize inner activities and be in touch with consumers . Inventory Management provides the information to executive who make more precise and appropriate choice to run their operation. Inventory management is vital for businesses as it incurred the biggest expense of an organisation and must be carefully managed in order for the business to run successfully. contain the incorrect inventory, or too large amount inventory can cut wealth to hazardous stage, but if done cautiously stock up a company will almost certainly can cut its expenses and increase its profitability Inventory management system is to track and uphold inventory thus customers require can be met. This system is always concurrent to the accounting or else management departments to become more efficient by controlling expenditure and increase the profits. Inventory management system works by saves customer sales in a real-time format, and automatically re-ordering stock when it reaches a pre-determined level. This electronic ordering is name EDI (Electronic Data Interchange) and by that companies will always hold essential stock, and so will not squander cash on ordering the unwanted.

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These method can also distinguish among dissimilar styles of the same stock, such as range or colour variations, so a company will not have an excess of one and not enough of the entire range. This process enables management to see what is selling and what is not, so future decisions can be made using facts, rather than hunches, again making inventory more cost-effective. Close by are a lot of technologies to ease by the difficulty of inventory management. Such as; Auto ID, Bar code scanning, Data Capture, Digital Photography, Document Management, Electronic Data Interchange, Label Printing, Object Databases, OCR - Optical Character Recognition, Radio Frequency Tagging Security, Monitoring Wireless Networking. There are three basic reasons for keeping an inventory, first is Time The time interval of lead time. Though, in custom, inventory is to be uphold for use during difference in lead time. Lead time itself can be deal with by ordering many days ahead. Secondly is uncertainty - Inventories are uphold as buffers to meet doubts in demand, supply and schedule of goods. Thirdly is economies of scale - perfect state of a unit at a period at a place anywhere it required, when it required rule be likely towards deserve plenty of expenses in terms of logistics. So mass purchasing, movement and storing convey in economies of scale, so inventory. These stock cause can be relevant to some business and manufactured goods. Buffer stock is held in person workstations next to the option that the upstream workstation might be a slight late in extended setup or alter over time. This stock is then used as that move is occurred. Particular conditions used in dealing with inventory such as; stock keeping unit (SKU) is an exclusive mixture of every one mechanism to fabricated into the purchasable piece. As a result, one alter in the packaging or manufactured goods is a fresh SKU. This point of comprehensive arrangement help in supervision of inventory. New old stock (NOS) is a word used in commerce to refer to goods being presented for sale that was put on extensive period has certainly not been utilize. Such goods might not be created any longer, in addition to the new old stock may stand intended for the lone market basis of a particular piece at the current moment. Mainly manufacturing companies usually split their goods inventory into; raw materials - resources and mechanism listed for use in creation of a merchandise, work in process, WIP - resources and mechanism to conversion to complete goods, completed goods merchandise ready for trade to consumers, goods for resale - returned merchandise that are profitable. Characteristically, Inventory Management method include Pareto Curve ABC and economic order quantity management.

Unnecessary inventory insert extremely to the company working capital joined up in the business, as well as the complexity of the supply chain. Decrease and removal of these inventory stay states is a main concept in Lean. Too large an inventory decrease too rapidly can be reason for a business to be confused. readily available procedure and method to aid in inventory planning and strategy, together at the business impression and division figure stage. a lot of the huge MRP/and ERP systems didn't tender the essential inventory preparation equipment inside their included preparation request. Inventory act as the blocked-up Working Capital of a business in the form of resources . Since this is the blocked-up Working Capital of business, preferably it have to be zero. This Inventory is uphold to get concern of fluctuations in order and lead time. In a number of cases it is uphold to get concern of rising cost propensity of commodities or discount in mass purchasing.

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The secondary objective of inventory harmonised is inventory disparage. By put together precise demand forecasting with inventory management, replacement inventories can be planned to arrive just in time to stock up the manufactured goods intended to run out first, whilst at the similar period balancing out the inventory supply of all goods to make their inventories more harmonised, and thus faster to achieve the main objective. precise demand forecasting to allow the wanted inventory adjust to be projectile by determining usual sales out into the prospect; this allow for inventory to be in amount to expected temporary sales or utilization rather than to earlier period averages, a much more precise and best possible result. Mix demand forecasting into inventory management this technique allows for the forecast of the be able to fit aim whilst inventory storage is restricted on a per-good basis. The method of inventory proportionality is most suitable for inventories that stay hidden from the customer. As opposite to stay filled scheme where a retail customer like to see filled shelve of the goods they are purchasing so as not to believe they are purchasing somewhat old, redundant or out of dated; and distinguished as of the activate aim method where goods is reorder as it knock down to low stage; inventory proportionality is used successfully by just-in-time procedure companies and retail function where the merchandise is concealed from sight. Commerce replica, as well as Just in Time (JIT) Inventory, Vendor Managed Inventory (VMI) and Customer Managed Inventory (CMI), effort to cut on-hand inventory and increase inventory turns. VMI and CMI have gained substantial attention due to the achievement of third-party vendors who tender more skill and information that companies might not have.

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REFRENCES
http://www.nextlevelpurchasing.com/articles/early-supplier-involvement.html http://www.manufacturing.net/developing-medical-components. http://en.wikipedia.org/wiki/Johor http://en.wikipedia.org/wiki/Batam http://csdd.tufts.edu/ http://EzineArticles.com/4499595 http://www.aaxnet.com/topics/inv.html http://findarticles.com/p/articles/mi_m4153/is_6_57/ai_69759746/?tag=mantle http://www.ehow.com/about_5518506_importance-inventory-management-systems.html http://www.iimm.org/knowledge_bank/6_purpose-of-inventory-management.htm http://www.purchasing-procurement-center.com/what-is-inventory-management.html http://managementhelp.org/operationsmanagement/

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