Original Date: 01/23/1995
Revision Date: 01/18/2007
Best Practice : Just-In-Time Procurement System
Sandia National Laboratories (SNL) has a Just-In-Time (JIT) Procurement System designed to put general purpose items at workstations as they are needed. It is an automated ordering system designed to allow the end user/requester to place an order for commercial, off-the-shelf, low-dollar items. It has eliminated the need for a conventional purchase order and storage area. The automated JIT system provides Sandia National Laboratories personnel the opportunity to order supplies when needed from a personal computer. The system provides information on the supplier's quality and delivery of products.
This system was created ten years ago to eliminate the need for a buyer- middle man which caused delays resulting from the procurement process and workload. It eliminated the need for a warehouse and attendants, and the warehouse now houses the procurement department, and the attendants are involved in other productive tasks.
Part of the success of this JIT system is from cultivating proactive suppliers who expedite orders rapidly, maintain inventories, and provide direct communications with the requester. To get this commitment, Sandia National Laboratories has developed long term relationships, and fostered a service-level requirement which created a win-win relationship.
The JIT system has eliminated storage requirements, reduced waste, removed the buyer as a middle man, and realized an $11M annual savings. With the automated system and the partnership between Sandia National Laboratories and its suppliers, supplies can be delivered as quickly as the same day and the supplier paid within a week of receipt.
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