CH. 10 Sourcing & Supply Management for FINAL EXAM Flashcards
the identification, acquisition, and management of inputs and supplier relationships that a firm needs to attain its strategic objectives.
supply management (also known as purchasing or procurement)
the identification, evaluation, and selection of suppliers.
sourcing
the probability of an unplanned event in acquisition, delivery, and use that negatively affects a firm’s ability to serve its customers.
supply risk
considers all the costs incurred before, during, and after the purchase of a good or service.
total cost of ownership (TCO)
Business practices designed to positively affect people, society, the planet, as well as profits.
Sustainability
acquiring inputs from operational processes done within the firm
insourcing
acquiring inputs from operational processes done by suppliers
outsourcing
the choice between making a product internally or purchasing it from a supplier
make or buy decision
A process that identifies what purchases are being made in an organization.
spend analysis
Purchases that are unique and core to firm’s performance. Represent a high spend level and are high risk.
Strategic purchases
Purchases that are not core to the firm’s performance, but lack of availability can cause delays. Represent high risk and low spend.
Bottleneck purchases
Purchases that involve standard goods or services where many possible suppliers are available. Represent low risk, but represent a high level of spend.
Leverage purchases
Purchases that are a low percentage of overall spend and have little impact on performance.
noncritical items
the determination of the number of suppliers to use
supply base optimization
relationships characterized by distrust and limited communications
adversarial relatonships
relationships limited to simple purchasing transactions
arm’s length relationships
a collaborative relationship that lacks the commitment of a full partnership
acceptance of mutual goals
relationships that have close working relations, trust, mutual respect, and highly integrated operations.
full partnerships
a selection process in which suppliers submit bids to win the buyer’s business
competitive bidding
documents that describe the purchase requirements as specifically as possible.
request for proposal (RFP) or request for quotation (RFQ)
establishes performance categories that are weighted according to importance
weighted-point model
competitive bidding systems that allow suppliers to submit multiple bids within a fixed time
online reverse auctions
a bargaining process involving a buyer and seller seeking to reach mutual agreement
negotiation
