Chapter 1: Principles of Sourcing Flashcards
What is Sourcing
The process of finding the best suppliers to have the best inputs possible
What is Procurement/Purchasing
the activities associated with establishing the relationship between supplier and customer
What is supply/Inbound Logistics
Involved with the timing, quantity and locations of goods ans services
What is the Tactical and Operational Procurement Process
1) Procurement Process : Sourcing -> Negotiation -> Contract -> Order and Expediting
2) Procurement Platform: Organisation, Performance, Controlling, Tools, IT
What is RFx
Request for Anything:
RFP : Request for Proposal
RFQ: Request for Quote
RFI: Request for Information
Give me 3 classifications of Purchasing goods
Raw Materials: Basics for production with minimal transformation (iron…)
Semi-manufactured Products: Processed material needing further work
Finished Products: Ready to be sold with minimum added value (phone..)
What are Procurement Objectives
Secure of Supply
Prices Optimisation
Internal Price Optimisation
Digitalisation
What are the Cost Optimisation Levelers
1) Commercial “Price Reduction”: competitive Negotiations, global suppliers
2) Technical “Design to Cost”: Value analysis, target costing
3) Processes “Supply Chain Optimisation”: Make-or-buy, Outsourcing, SCM
What is Outsourcing
The process of hiring a 3rd party to conduct services that were typically performed by a company itself
What is TCO
Total Cost of Ownership: Overall cost of product /service throughout its lifecycle
What is Make-or-Buy Decision
The act of choosing between manufacturing product in-house or purchasing from external suppliers
What is Break Even Analysis
Determines the amount of units/amount of revenue needed to cover all costs
What are arguments for “Make”
Protection of know-how: innovation/uniqueness
Cost-saving
Quality Management
Customer Servie
What are argument for “Buy”
Cost Reduction
Risk Sharing: reduced delivery risk…
Assess management
Availability of know-how
