Application of value stream mapping for improvement of efficiency in purchasing process for a chemical company in Qatar

Abstract

Lean management methods have been used to improve productivity and performance in organizations. As one of the lean management methods, value stream mapping (VSM) uses the process flow map to analyze current processes so that process bottlenecks can be analyzed for streamlining or elimination. The procurement process of a chemical company is studied in this project. Current state map is drawn to display the procurement activities and flow of information from time a material need is triggered and a purchase requisition is raised by the end user to the final release of the purchase order, to enable delivery of the materials by the supplier. Secondary data was collected to determine the average number of PRs converted into POs every month and the order processing rate was calculated. Inefficiencies along the procurement process were identified and marked. A desired future state map was drawn excluding the inefficient steps or with reviewed steps. Improvement program is established and implemented to eliminate the inefficiencies along the process. After the implementation of the improvement program, the number of PRs being converted to POs improved by 50.8% from an average of 600 to 905; order processing rate improved by 33.8% from 80 to 53 minutes.