Module 1 - F Flashcards
certified supplier
A status awarded to a supplier that consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required.
consignment
1) A shipment that is handled by a common carrier. 2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.
continuous replenishment
A process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales (for example, by size or color) without stockouts and without receiving replenishment orders. The result is a lowering of associated costs and an improvement in inventory turnover.
Dock-to-stock
A program through which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer’s inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection, and enables product to move directly into production.
landed cost
This cost includes the product cost plus the costs of logistics, such as warehousing, transportation, and handling fees.
multisourcing
Procurement of a good or service from more than one independent supplier.
physical supply
The movement and storage of goods from suppliers to manufacturing. The cost of physical supply is ultimately passed on to the customer
procurement
The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations
purchase order
The purchaser’s authorization used to formalize a purchase transaction with a supplier. A purchase order, when given to a supplier, should contain statements of the name, part number, quantity, description, and price of the goods or services ordered; agreed-to terms as to payment, discounts, date of performance, and transportation; and all other agreements pertinent to the purchase and its execution by the supplier
purchase requisition
An authorization to the purchasing department to purchase specified materials in specified quantities within a specified time.
purchasing
The term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services.
quality
Conformance to requirements or fitness for use. Quality can be defined through five principal approaches: (1) Transcendent quality is an ideal; a condition of excellence. (2) Product-based quality is based on a product attribute. (3) User-based quality is fitness for use. (4) Manufacturing-based quality is conformance to requirements. (5) Value-based quality is the degree of excellence at an acceptable price. Also, quality has two major components: (1) quality of conformance—quality is defined by the absence of defects, and (2) quality of design—quality is measured by the degree of customer satisfaction with a product’s characteristics and features.
request for quote (RFQ)
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors
reverse auction
An internet auction in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer.
single-source supplier
A company that is selected to have 100 percent of the business for a part although alternate suppliers are available.
sole source
The situation where the supply of a product is available from only one organization. Usually technical barriers such as patents preclude other suppliers from offering the product.
supplier
1) Provider of goods or services. 2) Seller with whom the buyer does business, as opposed to vendor, which is a generic term referring to all sellers in the marketplace.
supplier certification
Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer’s requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards.
supplier relationship management (SRM)
A comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services the enterprise uses. The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers. SRM is often associated with automating procure-to-pay business processes, evaluating supplier performance, and exchanging information with suppliers. An e-procurement system is often an example of an SRM family of applications.
terms and conditions
All the provisions and agreements of a contract
total cost of ownership (TCO)
In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream. The main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership.
vendor-managed inventory (VMI)
A means of optimizing supply chain performance in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer. Accomplished by a process in which resupply is performed by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels. The vendor obtains a receipt for the restocked inventory and accordingly invoices the customer.
