Chapter 1 Flashcards
What are the 4 business needs?
- Tangible
- Intangible
- Direct
- Indirect
Performance Specification Characteristics
- Allow supplier innovation
- Promote competition in the marketplace
- Supplier bears risk
- Buyer may not know exactly what they’re getting
- Shorter documentation
- Quicker to prepare
- Takes advantage of supplier expertise
Conformance Specification Characteristics
- No supplier innovation
- Reduced competition
- Buyer bears risk
- Buyer knows exactly what they’re getting
- Longer, complex documents
- More time consuming to prepare
- Disregards supplier expertise
What Matrix measures strategic importance against contribution to operational performance?
Carter’s Outsource Matrix
What are the 4 quadrants of Carter’s Outsource Matrix?
- Strategic alliance
- Retain
- Eliminate
- Outsource
What mechanisms can be used to analyse and test the market?
- Carter’s Outsource Matrix
- STEEPLED analysis
- SWOT analysis
- Porter’s 5 forces
- Supply & Demand
- Push & Pull
- Product life cycle
- Ansoff Matrix
- Offshoring
Benefits of Outsourcing?
- Save money
- Reduce overheads
- Reduce headcount
- External knowledge
- Allows to focus internally on core competencies
- Helps with shortfalls in labour/expertise
Disadvantages of Outsourcing?
- Loss of control
- Relying on external organisations
- Potential loss of quality
- Loss of internal knowledge
What are the 13 stages of the procurement cycle?
- Define need & develop spec
- Make or buy
- Develop strategy & plan
- Pre-procurement market testing
- Develop docs & finalise spec
- Supplier selection to participate
- Issue tender docs
- Bid & tender evaluation and validation
- Contract award & implementation
- Warehouse & logistics
- Contract performance
- Supplier relationship management
- Asset management
What is a Service Level Agreement (SLA)?
Document outlining the minimum level of service between provider and client.
Clarifies scope and responsibilities.
Legally enforceable if referred to in a contract.
What is a Key Performance Indicator (KPI)?
Measurable value which enables buyers to track how well a supplier is performing
From low to high, name the types of relationships on the CIPS relationship spectrum.
Adversial
Arms Length
Transactional
Moderate
Bespoke
Single-Source
Ooutsourced
Strategic
Collaborative
Partnership
Co-destiny
From low to high, name the types of relationships on the CIPS relationship spectrum.
Adversial
Arms Length
Transactional
Moderate
Bespoke
Single-Source
Ooutsourced
Strategic
Collaborative
Partnership
Co-destiny
The Supplier Preferencing Matrix measures what?
The value of a buyer’s account against how attractive they are to a supplier
What are the 4 quadrants of the Supplier Preferencing Matrix?
Development
Core
Nuisance
Exploitable
What are the 4 quadrants of The Kraljic Matrix?
Leverage
Strategic
Routine
Bottleneck
What are the benefits of structured procurement processes?
- Protects from coercion, bribery and fraud
- promotes ethical behaviour and protects from repetitional damage
- compliant and conformant procedures help protect the organisation to limit risk
- contingency plans and backup procedures help ensure continuity of supply
- enhanced efficiency
- validation and training
- aid audits
Limitations of structured procurement processes?
- may become quickly outdated due to changes in legislation, may not be legally compliant
- revision control required so working to correct version
- complex language, need to make sure everyone understands
- may be limited and hold back from better ways of working. Less room for innovation
