Expediting
Encyclopedia
Expediting is a concept in purchasing
and project management
for securing the quality and timely delivery of goods and components.
The procurement department or an external expediter controls the progress of manufacturing at the supplier concerning quality, packing, conformity with standards and set timelines. Thus the expediter makes sure that the required goods arrive at the appointed date in the agreed quality at the agreed location.
Expediting is especially needed in large scale project
s, for example, when a power plant or a refinery
is erected, because a delay caused by late delivery or inferior quality will get very expensive. To save these unnecessary costs, the supplier and customer may agree on the use of a third party expediter. These are specialists from companies specializing in this field who keep track of the deadlines and whether the components are properly packed. After inspection they notify the involved parties and banks about their findings; if everything is as agreed the bank will initiate the transfer of the price of the goods to the supplier. In this way, the supplier secures his liquidity as he is paid immediately when the components leave his factory (letter of credit
) and the customer/bank knows that the goods will be delivered correctly.
Expediting exists in several levels:
As the different levels of expediting require different skills, specialists and laboratories, many third party expediters specialize in only one or several of these levels, while few offer expediting services on all levels.
Larger companies normally have their own expediters who can perform all four levels. Third parties then are only used when in-house capacity is overstretched or a neutral third party is needed.
Purchasing
Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise. Though there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations...
and project management
Project management
Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end , undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value...
for securing the quality and timely delivery of goods and components.
The procurement department or an external expediter controls the progress of manufacturing at the supplier concerning quality, packing, conformity with standards and set timelines. Thus the expediter makes sure that the required goods arrive at the appointed date in the agreed quality at the agreed location.
Expediting is especially needed in large scale project
Project
A project in business and science is typically defined as a collaborative enterprise, frequently involving research or design, that is carefully planned to achieve a particular aim. Projects can be further defined as temporary rather than permanent social systems that are constituted by teams...
s, for example, when a power plant or a refinery
Refinery
A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value.-Types of refineries:Different types of refineries are as follows:...
is erected, because a delay caused by late delivery or inferior quality will get very expensive. To save these unnecessary costs, the supplier and customer may agree on the use of a third party expediter. These are specialists from companies specializing in this field who keep track of the deadlines and whether the components are properly packed. After inspection they notify the involved parties and banks about their findings; if everything is as agreed the bank will initiate the transfer of the price of the goods to the supplier. In this way, the supplier secures his liquidity as he is paid immediately when the components leave his factory (letter of credit
Letter of credit
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking....
) and the customer/bank knows that the goods will be delivered correctly.
Expediting exists in several levels:
- production control: The expediter inspects the factory whether the production is up to the standards of the country the goods are destined for. This is especially necessary for food or engineering equipment like power plant components. He controls as well whether the regular audits for ISO 9001 etc. have been made.
- quality controlQuality controlQuality control, or QC for short, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects:...
: The components are tested whether they function as required and whether they are made to the measurements and standards of the customer. A part of this quality control can be the testing for compliance with standards of the destination country, e.g. ASME.
- packingPackingPacking may refer to:In Mechanical engineering:* Packing, also known as an O-ring or other type of Seal , a term for a sealing materialIn Chemical engineering:* Structured packing, i.e...
/transport survey: This is the lowest and most used level of expediting, as the goods are only counted and the packing is controlled whether it will withstand the adversities of transport (pre-shipment inspectionPre-shipment inspectionPre-shipment inspection, also called preshipment inspection or PSI, is an important and reliable quality control method for checking goods' quality while clients buy from the suppliers....
).
- project managementManagementManagement in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
: At a large-scale project, not only goods are controlled. The expediter also keeps an eye on the deadlines and milestones of the project and whether the supplier will be on time. This way he monitors the crucial procurement parts of the project.
As the different levels of expediting require different skills, specialists and laboratories, many third party expediters specialize in only one or several of these levels, while few offer expediting services on all levels.
Larger companies normally have their own expediters who can perform all four levels. Third parties then are only used when in-house capacity is overstretched or a neutral third party is needed.