Chapter 1 - Definitions Flashcards
Holistic management of relationships formed between buyers and suppliers based on the criticality of the goods or services being procured.
Supplier Relationship Management
A supplier that is part of the same company as its customer.
Internal Supplier
A supplier that is independent of the organisation it provides goods/services to.
External Supplier
A benefit that an organisation can use to outperform its competitors in the marketplace.
Competitive Advantage
CIPS Relationship Spectrum
- Adversarial
- Arm’s Length
- Transactional
- Moderate
- Bespoke
- Single Source
- Outsourced
- Strategic
- Collaborative
- Partnership
- Co-destiny
When a buyer chooses just one supplier to contract with from a number of suppliers in the marketplace.
Single-Source
A situation where just two suppliers are chosen from multiple options in a marketplace with a view of maintaining a degree of competition during the contract term.
Dual-Source
A non-competitive situation where there is only one supplier of goods or services who can fulfil the requirement of the buyer at a specific time.
Sole-Source
An essential reliance on both parties to make the relationship work at a strategic level for its continued success.
Symbiosis
The ratio of liquid assets to liabilities.
Liquidity Ratio
A measure of how the business is being funded, based on its ratio of debt to equity, quality of debt or cost of debt.
Gearing
A process involving risk identification, assessment, management and mitigation.
Risk Management
The process of working with a supplier to improve its processes and/or the products or services it delivers.
Supplier Development
Failure of performance within a contract.
Material Breach
A situation that involves exposure to danger.
Risk
The spend of an organisation is broken down into groups of related products and services.
Category Management
Continuous Improvement Cycle
Plan
Do
Check
Act
A situation where one supplier has the entire market share and there is no competition.
Monopoly
A market with only one buyer,
Monopsony
A situation where the buying organisation purchased one of its suppliers of raw materials.
Backward Integration
A situation where an organisation purchases a customer or agent managing its customer delivery mechanisms.
Forward integration
When a buyer owns companies within its supply chain.
Vertical integration
A situation when an organisation buys or merges with a competitor in the marketplace.
Horizontal Integration
The process by which the world is becoming more interconnected, which means that events in one location are shaped by things that happen many miles away.
Globalisation
A contract exclusion clause, limiting (or excluding) liability when a party is unable to fulfil its obligations under a contract due to genuinely unforeseen and unpreventable circumstances.
Force Majeure
Non-cash releasing benefits generated via procurement processes and supplier relationship management.
Added Value
STEEPLED Analysis
- Social
- Technological
- Economic
- Environmental
- Political
- Legislative
- Ethical
- Demographical
The financial benefits for a buyer of establishing, developing and maintaining buyer-supplier relationships.
Return on relationship investment (RORI)
A benefit that an organisation can use to outperform its competitors in the marketplace.
Competitive Advantage
A process whereby one party agrees to allow the other access to its finances to scrutinise and analyse costs
Open Book Costing
A contractual option where the supplier is obliged (sometimes for a fee) to take back old stock.
Stock Cleanse
