Chapter 10 Flashcards
Supply Management
the identification, acquisition, and management of inputs and supplier relationships
Five Goals of Supply Management
- Ensure timely delivery of resources
- Reduce total costs
- Enhance Quality
- Access technology and innovation
- Foster sustainability
Sourcing
the identification, evaluation, and selection of suppliers
Examples of Supply Risk (4)
lean manufacturing
JIT delivery
reliance on a single supplier
global sourcing
Total Cost of Ownership (TCO)
all of the costs incurred before, during, and after a purchase
Sustainability
business practices designed to positively affect people, society, the planet, as well as profits
Make or Buy Decision
the choice between making a product internally or purchasing it from a supplier
Spend Analysis
a process that identifies what purchases are being made in an organization
Purchase Requisition
a document that communicates needs between the user and supply management
A sourcing strategy must consider: (3)
number of suppliers to use
capabilities and location of suppliers
type of relationship and contract length
Supply Base Optimization
the determination of the number of suppliers to use
Four Types of Supplier Relationships
- Adversarial
- Arm’s-length
- Relationships that acknowledge acceptance of mutual goals
- Full Partnerships
Competitive Bidding
a selection process in which suppliers submit bids to win the buyer’s business
Request for Proposal/Quotation (RFP/RFQ)
documents that describe the purchase requirements as specifically as possible
Weighted-Point Model
establishes performance categories that are weighted according to importance
Online Reverse Auctions
competitive bidding systems that allow suppliers to submit multiple bids within a fixed time frame
Electronic Data Interchange (EDI)
the structured secure electronic transmission of data between organizations
Supplier Scorecard
used to report a supplier’s performance on key performance indicators (KPI)
Supplier Relationship Management (SRM)
a comprehensive system, facilitated by software, that works on managing the firm’s interactions with its supply base
Eight Steps to Outsourcing Decision
- Asses Fit with the firm’s core competencies
- Evaluate the suitability for outsourcing
- Evaluate the reasons for outsourcing
- Assess all relevant costs
- Assess all qualitative factors
- Review the capabilities of the supplier
- Make and implement a decision
- Monitor the decision and revise it as necessary
Five Steps to Sourcing Process
- Analyze spend and markets
- Develop sourcing strategy
- Identify potential suppliers
- Assess and select suppliers
- Manage relationships
High Supply Risk, High Value
Strategic
High Supply Risk, Low Value
Bottleneck
Low Supply Risk, High Value
Leverage
Low Supply Risk, Low Value
Noncritical
