Chapter 4 Flashcards
Process of acquiring goods and services from a third-party vendor through direct purchasing.
Procurement
Cycle time of traditional procurement
4 Days and 6 Hours
Cycle time of E-procurement
1 Day and 2 Hours
Types of procurement strategies
- Cost reduction
- Sustainable Purchasing
- Risk Management
- Supplier Relationship Management
- Global Sourcing
- Total Quality Optimization
Type of strategy is beneficial to organizations in accounting for company expenditure and improving organizational functions.
Cost reduction
Ideal option for businesses striving toward minimizing their carbon footprint.
Sustainable Procurement
Also known as green purchasing, it highlights the procurement of quality goods and services with low environmental impact.
Sustainable Purchasing
Part of any business transaction or process.
Risks
Concentrates on minimizing risks related to the procurement of goods and services.
Risk mitigation
Emphasizes forming robust supplier relationships and empowering them to enhance their capabilities.
Supplier relationship management
A well-defined strategy that entails procuring products and services from an expansive range of international suppliers.
Global Sourcing
Method of strategy that ensures quality procurement by way of acquiring the right products that adhere to the highest standards.
Total Quality Optimization
Involves the gathering of facts, data, observations, and trends about the marketplace in which supplier conduct business.
Supply Chain Analysis
Involves an assessment of multiple key areas that impact the full Sourcing and Procurement spectrum.
Spend Management
Subset of Spend Management; Involves all of the common processes that you would expect - data retrieval, cleansing, classifications, interpretation, and presentation.
Spend Analysis
Advantage of Supply Chain Market Analysis
- It helps identify market opportunities
- It helps guide interaction w/ supplier
- It can help reduce expenses
- It improves efficiency
Strategic tool used by procurement and supply chain professionals to identify and minimize supply risks.
Kraljic Matrix
This quadrant is represented by items which are least critical to your business and account for least expenditure.
Routine
SKUs/Service in this quadrant are similar to routine quadrant but the spend value is very high for these items.
Leverage
These SKUs/Services are characterized by high risk and low annual expenditure value.
Bottleneck
These items are very critical to your business; spend value of these items is higher and offers higher level of attractiveness to suppliers for doing business with your company.
Critical
It was developed in the 1970s to improve the purchasing process.
Electronic Data Interchange (EDI)
The rapid advent of internet technology in the ______ spurred the growth of more flexible internet-based e-procurement systems.
1990s
Advantages of E-procurement System
- Time savings
- Cost savings
- Accuracy
- Real time-use
- Mobility
- Trackability
- Management benefits
- Supplier Benefits
