Repurposing sourcing : a procurement
Repurposing is a strategy that is generally overlooked when it comes to sourcing . Procurement does not necessarily have to be a pricey undertaking , as it is also possible to reuse existing parts . Dr S . Vijayakrishnan delves into this procurement strategy .
By Dr . S . Vijayakrishnan strategy worth looking at
Activities of the procurement activity in organisations begin with the user department providing specifications and other details of the item or part to be procured . This is typically engineering or design department in manufacturing companies and engineering , operations or maintenance departments in processing companies . A significant difference between these two types of companies is the volumes of parts procured . A manufacturing company procures large volumes of parts , makes equipment , and sells them . Procurement volumes of processing companies would be huge for raw materials but small for parts or components for plant equipment , usually for maintenance . The objective of any procurement function is to source the parts at optimal prices , which may not necessarily be the minimum prices , but usually are . This is much more important for a manufacturing company due to the large volumes involved ; a small differential in procurement cost may add or subtracts a significant figure to the bottom line . Procurement teams , therefore , constantly strive for and innovate ways to source at a marginally lower cost . This article is about a strategy useful in this pursuit but usually overlooked - that is to source items that can be repurposed rather than designed and produced on order . Repurposing essentially means sourcing and using a part or component that is produced by its manufacturer for some other purpose or user . In general , it would be possible to procure such parts more economically than those produced to order based on our specifications- sometimes even at huge savings too . Also , as these can usually be procured in small quantities with no MOQ restrictions , just-in-time sourcing and reduction in inventory are additional positive fallouts . A manufacturing company that embarks on adding repurposing sourcing to its strategy should include their design / engineering and often , the sales & marketing team too . Along with the Purchase department , they should evolve a joint ‘ search , evaluate , adjust and incorporate ’ plan . Final product specifications may need to be changed slightly with trivial or no impact on functionality ; some other minor changes may have to be communicated and got accepted by product end users . Briefly , the activities should involve the following :
• A search for the required part by its broad specifications ( vague systems ). It is easy to do this on the net these days with a wide amount of information made available by manufacturers – usually all except pricing .
• Obtain budgetary pricing for some likely candidates for small quantity orders .
• Using a couple of the commercially attractive ones , evaluate with Engineering on the
20 Valve World February 2023 www . valve-world . net