ETNA Industrie is reorganizing its Supply Chain to rise to new challenges
In a context of increasing competitive pressure, the Supply Chain makes a significant contribution to enterprise competitiveness. Nowadays, we see growing convergence between the cost price of making industrial products and their selling price. There are ever more stringent requirements in terms of safety, traceability and ecology, which raise the costs of manufacturing, further boosted by the cost of raw materials, whilst facing competitive pressure from market entry by the emerging economies. The Supply Chain plays a critical role by enabling companies to stay competitive in a fast-changing environment. Industrial manufacturers must therefore concentrate on the Logistics Chain to reduce their costs and raise their margins in markets where prices are driven down by low-cost operators.
Building on its 75 years of experience, ETNA Industrie maintains and retrofits its installed fleet, some of whose components have clocked up a service life of longer than 40 years, while providing our customers with the skills and expertise developed by ETNA Industrie’s commitment to new applications and niche markets.
ETNA Industrie has risen to the challenge with a twofold reorganisation. The Supply Chain responds to the issues of technological obsolescence and to the issues affecting our panel of suppliers. New needs are met by recruiting new suppliers and sourcing their innovative products. The Supply Chain responds to the needs of our customers faced with market uncertainties and inability to make reliable forward estimates of need in a context of low visibility in the medium or longer term. The Supply Chain navigates in uncharted waters by seeking to manage the risks associated with the increasing technological sophistication and variety of components demanded or available. It seeks to provide forward-looking scheduling of production to ensure maximum fluidity, flexibility and continuity in response to changing demand.
This why the Supply Chain has been reorganized into two separate divisions known as Purchasing and Procurement. Each interrelates closely with the other, as they are interdependent.
Purchasing
Purchasing as part of the Supply Chain in ETNA Industrie is the interface between ourselves and our external suppliers. Purchasing sources the products which respond to our customers’ demand for investment in production plant, for short production runs, and for prototypes in the pre-qualification phase. Tasks devolved to Purchasing are:
- Analysis of requirements
- Seeking, identifying and qualifying suppliers
- Processing invitations to tender
- Negotiations
- Drafting and finalizing contracts
- Performance management and reporting
- Supplier assessment
- Payment
- Invoice handling
- Disputes settlement
Purchasing is not just about sourcing goods and production services, but involves meeting the other operational needs of ETNA Industrie itself, whilst ensuring the proper implementation of framework agreements, including the management and settlement of disputes if any. Purchasing is closely liked to Corporate Strategy.
Procurement
Procurement is the organisation, planning and control of the whole of the company’s inventory. The major support tasks devolved by ETNA Industrie upon this function are:
- Detection of requirements
- Initiation of purchase orders
- Approvals
- Issuing purchase orders
- Dispatches from inventory
- Supplier monitoring and reminders
- Acceptance into inventory
The main goal of Procurement is to strike the best balance between quality of service and the cost of ownership of inventory. Procurement handles demands for release from inventory in the context of the overall scheduling of the demands placed upon it (stock-in and stock-out) and the general physical and administrative management of deliveries to purchasers and end-users.
To summarise …
Purchasing is provides the answer to the questions What? Who for? and Why? as part of OEM projects where it is of the essence to maintain and foster emerging applications of industrial technology. Projects are often long term and articulated around new or more demanding performance requirements. Among examples are product development for industrial valves and dedicated equipment in manufacturing applications to supply the nuclear and defence industries.
Procurement on the other hand is the answer to the questions How many? When? and Where? Procurement focuses on responding to recurrent demand for ETNA Industrie’s ranges of manufactured products, for instance, low-volume orders for high voltage Switchgear, Capacitors and Make Switches that have been part of our product portfolio since 1966.
At end 2016 ETNA Industrie set up a new office located in the very heart of our production workshop, thereby integrating Procurement functions into the Supply Chain, Scheduling and Methods Departments. Physical proximity is a deliberate and strategic decision. It optimises speed of reaction, improves communication between departments in ETNA Industrie and our production island, thereby ensuring our customers benefit from constantly improving service.
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