Topic 11 Flashcards
(22 cards)
The identification, acquisition, access, positioning, management of resources + related capabilities the organization needs or potentially needs in the attainment of its strategic objectives
Purchasing
Translates the cost savings in logistics to the sales equivalent required to have the same profit impact
Profit-leverage effect
How the company competes; that is why do customers buy from you versus a competitor
Value proposition
A strategic tool used to classify all purchased inputs according to relative value/speed volume + supply market complexity; different categories suggest different strategic approaches to supply management
Strategic Sourcing Matrix (SSM)
A purchased input of relatively high importance/spend volume, + relatively low supply market complexity
Leverage Items
The process of 1. determining how many + which suppliers you should buy from, and 2. Defining the type of relationship you should build with each supplier
Supply-base Rationalization
A purchased input of relatively low importance/spend volume, + relatively high supply market complexity
Bottleneck Items
Two or more organizations that join together for the purposes of leveraging their combined spend volume to generate advantageous pricing + service conditions from suppliers
Purchasing Consortium
A purchased input of relatively high importance/spend volume, + relatively high supply market complexity
Critical Items
Analyze-> Source-> Bid/Negotiate + Contract-> Procure-> Reconcile +Pay
Strategic Sourcing Process
Order formally placed with external supplier; typically comes from purchasing personnel-if not, it may be an example of maverick spend
Purchase order
Something of value exchanged by two parties
Consideration
A tool that measures + displays supplier performance along criteria that you select
Supplier Scorecard
Integrated process from placing an order through receipt of goods/services to supplier payment
Procure-to-Pay (P2P)
When the supplier takes care of your inventory levels for their products
Supplier (vendor) Managed inventory (V/SMI)
An approach that goes beyond measuring price to consider all of the associated, + often hidden costs, of doing business with a particular supplier, or the cost of pursuing various options, such as using alternate processes, or insourcing vs outsourcing
Total Cost of Ownership (TCO)
Price paid + all the costs to get the items to the location where you need them
Landed costs
Need to know “everthign” about what you are buying
Resources
Need to know who you can meet your buying needs
Suppliers
Need to know the purchasing process inside and out
Processes
Need to know how new technologies will influence both processes and products
Technologies
