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Supply Chain Mgt > Exam 1 - Intro and Purchasing > Flashcards

Exam 1 - Intro and Purchasing Flashcards

1
Q

Goods flow …

A

downstream

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2
Q

Money flows …

A

upstream

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3
Q

Focal firm

A

Primary business, company responsible for final product

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4
Q

First-Tier Suppliers

A

Suppliers that directly supply goods or services to focal firm

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5
Q

Second-Tier Suppliers

A

Suppliers that provide goods or services to first-tier suppliers

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6
Q

First-Tier Customers

A

Customers that directly purchase products from focal firm

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7
Q

Second-Tier Customers

A

Customers of first-tier customers

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8
Q

Ex. Shoe manufacturer - Focal Firm

A

Shoe manufacturer

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9
Q

Ex. Shoe manufacturer - First-Tier Suppliers

A

Leather, rubber, packaging

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10
Q

Ex. Shoe manufacturer -Second-Tier Suppliers

A

Cattle farms. chemical companies

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11
Q

Ex. Shoe manufacturer - First-Tier Customers

A

Retailers (stores)

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12
Q

Ex. Shoe manufacturer - Second-Tier Customers

A

End consumers (buying shoes from stores)

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13
Q

Supply Chain Management

A

The synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and info with customer demand

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14
Q

Purchasing

A

Buy it

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15
Q

Logistics

A

Move it or store it

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16
Q

Operations

A

Make it

17
Q

Purchasing

A

The act of obtaining or buy goods and services. Includes preparation and processing of a demand as well as the receipt and approval of payment

18
Q

Goods

A

Low degree of customer service, high degree of tangibility

19
Q

Services

A

High degree of customer service, low degree of tangibility

Cannot be shipped, inventoried, hard to control

20
Q

Why should purchasing be considered a strategic role?

A
  • Without inputs, you won’t have any outputs
  • Supplier selection is a strategic decision
  • Purchased materials are often the biggest source of company spendings
21
Q

Direct benefits of good purchasing practices

A
  • Largest potential source of cost savings
  • Leverage effect
  • ROA (Return on asset)
  • Effecting the bottom line
22
Q

Indirect benefits of good purchasing practices

A
  • Good forecasting/strategic order sizes ease burden of inventory mgt
  • Higher quality can lead to less returns, scrapped products
  • Minimize potential operational/reputational risk
23
Q

7 Rights of Purchasing

A
  • Obtaining the right material
  • In the right quantity
  • With the right service
  • For delivery to the right place
  • At the right time
  • From the right suppliers
  • At the right place
24
Q

Golden Triangle of Purchasing

A

Delivery
Cost
Quality

25
Q

Bottleneck

A
  • Small volume, but critical item and few suppliers
  • Purchasing consortium
  • Collaborative partnerships
26
Q

Routine

A
  • Simple and inexpensive
  • KISS - Keep it Simple and Straightforward
27
Q

Leverage

A
  • Large volume from stable markets
  • Spend analysis
  • Supply-base reduction
  • Global sourcing
28
Q

Critical

A
  • Complex, high-volume/value items
  • Customer of choice
  • Long-term contracts
  • Build trust
29
Q

Factors Defining Complexity

A
  • Supply Market Landscape (are there many supplier or only a few?)
  • Risk (how important are you as a customer to potential suppliers?)
  • Technological Uniqueness (pace of technological change affects your decision-making certainty)
30
Q

Purchasing Structure Options for Large Organizations - Centralized

A

Authority and responsibility for most supply-related functions assigned to a central body

31
Q

Purchasing Structure Options for Large Organizations - Decentralized

A

Authority and responsibility for supply-related functions dispersed throughout the org

32
Q

Purchasing Structure Options for Large Organizations - Hybrid

A

Authority and responsibility shared between a central supply org and business units, divisions, and operating plants (takes advantage of both)

Supply Chain Mgt (7 decks)

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