ABSTRACT
One of the oldest and most common applications of Lean is often found in the more transactional purchasing process, so that is where we will start the discussion on Lean procurement. Some of the benefits are: Just-in-time and material requirements planning (MRP) are different but complementary concepts used in material planning and control and both help organizations to reduce order costs and inventory-holding time, which increases a company's cashflow. MRP also reduces the work in process inventory, while eliminating material shortages by increasing the reliability of materials' availability. Employing MRP along with JIT and incorporating them into an advanced planning and scheduling system can also result in a more optimal process flow, where realistic contingency plans can be constructed by utilizing what-if scenarios. Procurement involves the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts, actual purchasing of goods. Procurement is concerned with acquiring all of the goods and services, is where purchasing is located.
