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CIPS L4M1 > Definitions > Flashcards

Definitions Flashcards

1
Q

Procurement

A

Process of acquiring goods and services the company requires

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2
Q

Supply Chain Management

A

The extensive infrastructure needed to get the goods

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3
Q

Inter-business Relationships

A

Chain of commercial relationships

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4
Q

Supply

A

infrastructure which ensures products or services get from the supplier to the customer

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5
Q

Purchasing

A

The act of physically ordering or buying something

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6
Q

Fixed Costs

A

costs which do not change with the output of the company (must be paid independent of output of the company)

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7
Q

Direct Costs

A

Costs associated directly with the project/job/contract

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8
Q

Indirect Costs

A

Costs not directly associated with a project/job/contract

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9
Q

Variable Costs

A

Costs which change with the output of the organisation (rise as production increases)

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10
Q

Elements of Procurement

A
  1. Added Value
  2. Purchasing
  3. Inventory
  4. Waste Management
  5. Logistics
  6. Supply
  7. Cost
  8. Quality
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11
Q

Waste Management

A

Movement of waste from its inception to its final disposal

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12
Q

Primary Materials

A

Raw materials

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13
Q

Secondary Materials

A

Manufactured materials

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14
Q

Tertiary Sector

A

Provide Services

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15
Q

Stock Procurement

A

1- Primary Materials
2-Secondary Materials
3- Finished Product- stock for retail industry resale

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16
Q

Direct Procurement

A

Purchasing of large quantities of raw materials needed for production to produce product for customers

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17
Q

Indirect Procurement

A

Services and tools that do not form part of final product but required to maintain the business and production process

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18
Q

Non-Stock Procurement

A

Not on inventory, can be intangible goods. Belongs to tertiary sector; commercial services used to help run business.

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19
Q

Economies of scale

A

The trend of cost per unit decreasing as output increases and cost of tooling being shared amongst larger number of units.

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20
Q

Organisational budget

A

Monitors income and expenditure

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21
Q

Operational budget/expenditure

A

cost associated with running a business e.g. raw materials, rent, salary, transport

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22
Q

CAPEX

A

Budget relating to capital expenditure including capital purchases

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23
Q

OPEX

A

Budget relating to operational expenditure

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24
Q

Capital Purchases

A

Relate to assets of an organisation purchased to help a business develop, make money and keep with market trends

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25
Supply Chain
How the goods transform from raw materials to end user, including all activities and organisations associated
26
Upstream
Getting raw materials needed for production
27
Downstream
Processing raw materials into finished product
28
Supply chain management
Aims to reduce costs, improve value and reduce risk. Gives a competitive advantage over competition by adding value through the process and achieving it in the most effective, efficient and ethical way. Also involves managing customer relationships
29
Procurement v Supply Chain Management
Procurement ends from the point of delivery of the goods/services; SCM continues until the end consumer receives the product.
30
Complex Supply Chains
Tiers of suppliers; the lower the number, the closer to buyer
31
Logistics
The process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods, including services and related info, from the point of origin to the point of consumption for the purpose of conforming to customer requirements. (Control of flow of goods/services between 2 points)
32
Materials Management
the handling, storage, inspection and issuing of raw materials, components and finished goods
33
Material Requirement Planning
Materials and production planning system used in manufacturing environments- it can schedule orders, monitor inventory and manage production process
34
Enterprise Resource Planning
Includes more functions than MRP e.g. accounting, SCM, CRM, Manufacturing, Procurement management and materials management
35
Total Cost Ownership
total cost incurred by owning a product throughout its useful life
36
Total Cost of Acquisition
Total cost of acquiring a product from sourcing to receiving and installing. (Budget needed to get product onsite)
37
Internal Suppliers
linked by working either on same site or for same company
38
External Suppliers
Separate business entities from buying organisation
39
KPIs
Values that can be measured or monitored to assess levels of achievement
40
Supplier relationship management
Process for identifying all interactions with key suppliers and then managing them in a way that increases value from relationship for both parties
41
Tangible
Physical existence Depreciate Easier to liquidate Cost can be easily determines
42
Intangible
No physical existence Amortised Not easy to liquidate and sell Cost harder to determine e.g. software
43
Stakeholders
Any individuals or groups of individuals that have an interest in an organisation. They have an affect or are affected by the achievement of an organisations objectives
44
External stakeholders
Individuals outside the organisation who have an interest in the organisation and either impacted by it or could impact it
45
Internal stakeholders
People involved directly in the business e.g. directors
46
Service level agreement
An agreement between a supplier and a buyer based on quality, delivery, availability and other measurable criteria
47
Incoterms
``` Ex works Free carrier Carriage Paid To Carriage and insurance paid to Delivered at terminal ```
48
Fisher v Bell
Invitation to treat is not an offer
49
Felthouse v Brindley
Silence does not constitute acceptance
50
Contractual relationship
``` Consideration Intent to create legal relations Authority to sign 2 parties Offer & acceptance ```
51
Value
Extent to which a produce or service supplied to a customer or consumer meets their requirements
52
Requisitioning
Demand the supply of something by official order
53
Reverse auction
An auction in which sellers are bidding to sell services (reduce sale price)
54
E-auction
Auction between buyer and seller on an electronic platform
55
Electronic Data Interchange (EDI)
Electronic exchange of documents in an agreed format between organisations.
56
When does a conflict of interest arise?
When a person’s involvement within a business includes multiple interests which could influence and lead to preferential treatment
57
Ethics
Set of rules which govern behaviour of a person. Moral principles influenced by professions
58
Actual conflict of interest
If decision affects them personally
59
Perceived conflict of interest
Procurement person has personal interests which could influence the process
60
Policy
Part of an organisations strategic plan and contains info on how a business will conduct itself and its business activities
61
Procedure
How a policy is delivered
62
Organisational Accountability
All members of business working together and independently to achieve objectives defined through policies and procedures
63
Step change
Unfreeze —> change —> referees
64
Incremental change
Constant reaction to events - less problematic as it is a gradual change
65
Centralised structure
Activities carried out at 1 central location
66
Devolved procurement
Procurement carried out by location or departments
67
Hybrid structures
Combo centralised and decentralised
68
Consortium structures
When similar organisations or organisations with same needs collaborate for their mutual benefit
69
Sector
A classification given to an area of industry, society or the economy to distinguish it from other areas
70
Economic classifications
How they were funded, objective and policy
71
Name the economic sectors
Public Private Third Sector
72
Compliance
adhering to regulations, following legislation and conforming to rules.
73
Sustainability
(1) Supplier is performing well and likely to be in existence for foreseeable future (2) Environmentally aware and replacing natural resources used
74
Corporate Governance
the system of standards, procedures and policies by which an organisation is controlled

CIPS L4M1 (1 decks)

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