3.2 The Role Of Procurement Flashcards
How factors may a business consider when choosing it’s suppliers?
Reliability
Quality of goods
It’s brand image
Costs of the raw materials
Range of products that can be supplied
Flexibility of a supplier
Payment terms (how long does the business have to pay)
Contract term (how long will this deal last…)
What is procurement?
How a business gets it’s supplies
What is a supply chain?
The proses of which a raw material is changed into a product
This includes all businesses, employees, transportation … which happens duran this time
Because of globalisation supply chains can now get very complex as goods can be flown all over the world
How may a business benefit from a good supplier?
If they are more reliable then they can hold less stock and use a more JIT approach for stock control
If the supplier has a good reputation then this may reflect on the business
If a supplier supplies good quality raw materials then the business products will be higher quality which will lead to a better reputation
What is logistics?
The movement of goods, services, information or money through the production proses
What effects may a bad supplier have on a business?
Business may have to send back defected products
Business may gain a bad reputation because that are constantly late …
Low quality
Not reliable
How has advancements in technology and globalisation effected procurements?
It has made it easier as businesses have more options
What is direct procurement?
Buying raw materials
Eg wood, coal…
What is indirect procurement?
Buying maintenance, contacts, admin stuff
Eg supplies
