Give example explanation for purchasing in production control for a mobile phone business
In the context of a mobile phone business, purchasing in production control plays a crucial role in ensuring that the right materials and components are available at the right time and in the right quantities to meet production schedules and demand. Here’s an example explanation of how purchasing aligns with production control in this industry:
### Example: Purchasing in Production Control for a Mobile Phone Business
**1. Understanding Demand:**
The mobile phone business typically starts with understanding consumer demand, which can be influenced by various factors such as new product launches, seasonal trends, and marketing campaigns. For instance, if there is a forecasted increase in demand for a new smartphone model, the production control team must adjust its purchasing strategy accordingly.
**2. Inventory Management:**
To effectively manage production schedules, the purchasing team must maintain optimal inventory levels. Using an inventory management system, the team tracks the quantities of critical components, such as processors, cameras, displays, and batteries. When inventory levels reach a predefined threshold, it triggers an alert to initiate the purchasing process.
**3. Supplier Coordination:**
The purchasing department works closely with suppliers to ensure timely delivery of materials. For example, if the production schedule shows that the assembly of a new phone model is set to begin in six weeks, the purchasing team must place orders with suppliers for the necessary components well in advance to account for lead times and potential delays.
**4. Quality Assurance:**
In the mobile phone industry, quality is paramount. The purchasing team collaborates with the production control department to ensure that all components meet the required standards. They may establish partnerships with certified suppliers who can consistently provide high-quality parts. This minimizes the risk of production delays due to defective components.
**5. Cost Management:**
The purchasing department is responsible for negotiating contracts and prices with suppliers to manage costs effectively. For example, they may negotiate bulk purchase agreements or long-term contracts that help secure lower prices for essential components, reducing overall production costs and increasing profit margins.
**6. Just-In-Time (JIT) Purchasing:**
To reduce holding costs and mitigate the risk of obsolete inventory, the mobile phone business may adopt a Just-In-Time (JIT) purchasing strategy. This approach involves ordering components only as they are needed in the production process. The purchasing team must closely coordinate with production schedules and suppliers to ensure components arrive just in time for assembly.
**7. Flexibility and Responsiveness:**
The mobile phone market is highly dynamic, with rapid technological advancements and shifts in consumer preferences. The purchasing team must be flexible and responsive to changes in production plans. For instance, if a competitor releases a similar product, the team may need to accelerate the purchase of new features or components to quickly enhance their own product offerings.
### Conclusion
In summary, purchasing in production control for a mobile phone business involves a multifaceted approach that integrates demand forecasting, inventory management, supplier collaboration, quality assurance, cost management, and flexible strategies. By effectively managing these elements, the mobile phone business can ensure a smooth production process, meet customer demand, and maintain competitiveness in the market.