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Exam Flashcards

1
Q

Procurement

A

Is an of obtaining or acquiring goods and services

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2
Q

Supply management

A

Is the identification and management of resources needed by the organisation to achieve its objectives

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3
Q

Purchasing process involves

A
  1. Purchase planning - what kind of resources are needed for the organisation to function and meets it objectives
  2. Standard determination - determining the quality of standard of goods and services must maintain
  3. Supplier research and selection - finding an appropriate supplier to provide the required quantity of goods and services
  4. Specification development - providing a detailed description of the goods amd services required for by the organisation
  5. Price negotiation - getting the right quantity and the right quality of resources at the best possible cost
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4
Q

Purchasing

A

Deals broadly with those activities that have to be performed that ensures that good suppliers provides the firm with the right requirementat the right quantities at the best possible costs

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5
Q

Differences in supply management

A
  1. More strategic focus - aligning supply chain activities with the organisations overall business objectives and strategies
  2. Maintains a system approach - recognises that every component is interconnected and changes in one part affect the entire system
  3. Progressive approach in managing supply base - adopting the advanced analytics and data driven techniques to better understand customer needs and behaviours
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6
Q

Corporate Supply challenges

A
  1. Increased global competition - companies face intense competition from suppliers all over the world
  2. Evolving information systems - its difficult to manage data quality and accuracy in an increasingly digital environment
  3. Developing new technologies - rapid pace of technological change has created new opportunities for companies to improve their supply operations but also present new challenges
  4. Grater dependance on supply - companies must develop clear communication and protocols with suppliers
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7
Q

Corporate supply opportunities

A
  1. Identify opportunities to reduce costs - minimisng cost while maintaining the acceptable quality levels
  2. Identify opportunities to increase revenue - develop revenue streams to increase profitability.
  3. reduce total costs of ownership - minimising costs of owning and operating product to increase efficiency and improve sustainability
  4. Maximise value from suppliers - gets the most value from supplier relationships
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8
Q

Factors driving SCM

A
  1. Low cost
  2. wide availability of information
  3. Competition in domestic and international markets
  4. Customer expectations and requirements are more demanding
  5. Competition among supply chain
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9
Q

Profit leverage effect

A

A small percentage of saving in purchasing price may develop into a larger increase in net income

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10
Q

Bottom line impact

A

Direct
1. long-term contract- creates a sense of security for both buyer and seller
2. Switching suppliers- results in high quality services
3. Negotiating prices
4. Lower transport costs - can lead to costs savings and companies can quickly respond to demand.
Indirect
1. Better quality - improves customer satisfaction and image of the organisation.
2. Faster lead times - shorter lead times results in fast delivery and improve prductivity.
3. Make or buy
4. lower inventories

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11
Q

Opportunities for contribution of supply function

A
  1. Profit leverage effect
  2. Information source
  3. Effect on image
  4. Effect on effeciency
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12
Q

Differences between manufacturing and service organisations

A

Manufacturing
1. Largest portion of needs is generated by customer needs
2 largest spend will be on direct requirement which comprises products sold to customers
Service organisations
1. Largest portion of needs is generated by capital and services enabling employees to provide the required service
2. Spend is on resale

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13
Q

Supply chain orientation

A

Is the highest recognition of strategic values of managing opeartional activities and flows within and across supply chain

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14
Q

Three levels of strategic approach

A
  1. Corporate - decision and plans that determine the the direction of the business
  2. Business unit - decisions mold plans of a particular business unit necessary to contribute to a corporate strategy
  3. Functions - plans concern about how of each functional areas contribute to the business strategy
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15
Q

Organisational objectives

A
  1. Survival
  2. Financial
  3. Growth
  4. Environmental
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16
Q

Supply objectives

A
  1. Quality
  2. Quantity
    3 delivery
  3. Price
  4. Services
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17
Q

Challenges in setting supply objectives and strategies

A
  1. Effective interpretation of corporate objectives and supply objectives
  2. The choice of appropriate action plan
  3. Identification and feedback of supply issues
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18
Q

Six major supply strategy areas

A
  1. Assurance of supply - focuses on ensuring a reliable and consistent supply of products or services to meet customer needs
  2. Cost reduction - aims to reduce overall cost of goods and services by optimising supply chain operations and implement cost savings measures
  3. Supply chain support - focus on enhancing effeciency and effectiveness of the supply chain
  4. Environmental change - addreses growing concern about environmental sustainability in supply chain operations
  5. Competitive edge - focuses on differentiating the organisations offering through innovative supply chain solutions
  6. Risk management - involves assessing risk that can affect supply operations
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19
Q

Three categories of risk

A
  1. Operational risk - interruption of the flow of goods and services
  2. Financial risk - significant changes in price
  3. Reputational risk - damage of the organisations reputation due to supply issues
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20
Q

Four possible changed organisational strategies involving purchasing

A
  1. Material management - process of controlling and managing flow of materials
  2. Project management - focuses on managing specific project or procurement activities
  3. Logistics management - managing movement and storage of goods
  4. JIT - focus on minimising inventory levels and reduce waste
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21
Q

Goals of supply chain

A
  1. Maintain and improve quality - tracking performance indicators and identifying customer needs.
  2. Accomplish supply objectives at the best possible cost- supply managers should continouly alert to supply improvements possible in supply processes and purchasing.
  3. Provide uninterrupted flow of materials
  4. Develop best in class suppliers
  5. Improve organisations competitive position - strategies of supply chain must be focused on contributing to organisations goals and objectives
22
Q

Structure of organisations

A
  1. Centralised
  2. Hybrid
  3. Decentralized
23
Q

Centralised

A

authority and responsibility of supply related functions are assigned to the central organisation
Advantages
1. Easier to implement and enforce policies
2. Faster decision making
3. Better control over resource
4. strategic focus
5. ability to pay talent
Disadvantages
1. lack of business unit
2. lack of job flexibility
3. lack of recognition of unique needs.
4. distance from users

24
Q

Decentralized

A

authority and responsibility of supply related function are shared throughout the organisation
Advantages
1. speed of response
2. effective use of local sources
3. better communication with departments
4. broad job defeinition
Disadvantages
1. Can lead to lack of coordination
2. Can lead to conflicting priorities
3. Difficulty in implementing and enforcing policies accross organisation
4. encourages users not to plan ahead.

25
Q

Hybrid

A

Combined of centralised and decencteralise where authority and responsibility is shared between centralised organisation and business unit

26
Q

Purchasing activities

A
  1. Purchasing
  2. Purchasing research
  3. Inventory control
  4. Transportation.
  5. Outsourcing and subcontractors
27
Q

Key success factors for successful teams

A
  1. Dedication to performance
  2. Dedication to implementation
  3. The right people in the right time at the right time
  4. A compelling purpose and measurable goal’s
  5. Supportive organisational culture and systems
28
Q

Team leader responsibilities

A
  1. Help to maintain team focus and direction
  2. Provide performance feedback to members
  3. Maintain internal team conflicts
  4. Secure required organisational resources
29
Q

Need for robust supply process

A
  1. Large number of items
  2. Need for audit trail
  3. Severe consequences of poor performance.
  4. The process is closely tied to all other business processes and external environment
30
Q

Essential steps in Purchasing

A
  1. Recognition of need
  2. Description of need
  3. Identification and analysis of possible source of Supply
  4. Supplier selection and determination of items
  5. Preparation and placement of purchase order
31
Q

Methods for reducing small order transaction costs

A
  1. Standardisation
  2. Reverse auction
  3. Users pay directly
  4. Single sourcing
  5. Invoiceless payment
32
Q

Information needed for requisition

A
  1. Date
  2. Number
  3. Department
  4. Account number
33
Q

Informations systems

A

1.makes data more transparent, accurate and accessible to decision makers
2. It relieves decision makers of lower value adding tasks and allow them to focus on higher value adding task

34
Q

Benefits of information systems

A
  1. Data accuracy
  2. Data accessibility
  3. Systems integration
  4. Cost reduction
35
Q

Type of systems

A
  1. Erp systems
  2. Online auctions
36
Q

hybrid structure

A
  1. establishing policies
  2. recruiting and training of employees
  3. auditing purchasing performance
  4. developing corporate wide supply strategies
37
Q

key roles and responsibilities of supply

A
  1. what is acquired-refers to the various goods, materials, and services a company needs to operate and produce its products
  2. supply chain responsibilities - wide range of activities that ensure the smooth operation of the supply chain
  3. types of involvement - level of engagement and collaboration between a company and its suppliers.
  4. involvement in corporate activities - specific actions and initiatives taken to enhance collaboration and efficiency in the supply chain.
38
Q

challenges facing purchasing

A
  1. risk management- risks of supply interruptions and financials
  2. measurement - includes issues such as starndardization and limited data availability
  3. supply chain management- oppotunities to reduce inventory and shorten lead times
  4. sustainability - environmental concerns which includes waste reduction
  5. growth and influence
39
Q

importance of measurements

A
  1. improves future supply performance
  2. recognises outstanding performance
  3. determines if initiatives are working
40
Q

critical scm processes

A
  1. customer order fullfilment
  2. new product development
  3. demand and supply palnning
  4. supplier evaluation and selection
41
Q

core competencies

A

is a set of activities, skills, and advantages that distingushes a company offering from its competitors

42
Q

identifying core competencies

A
  1. difine organisational goal and objectives
  2. analyse job roles and functions
  3. cosultlts stakeholders
  4. identify knowledge skills and behaviours.
43
Q

outsourcing

A

it process of moving an aspect of production from within the organisation to an external supplier

44
Q

outsourcing trends

A
  1. contract manufacturing - is when a third party makes an end product under another companys brand
  2. third party logistics - using a supplier to provide some combination of logistics activities.
  3. offshoring - outsourcing in a different country
  4. business process outsourcing- outsourcing support functions such as HR and logistics
45
Q

benefits of outsourcing

A
  1. cost savings- outsourcing can reduce labor and operational cost as company only pay for the service or product they need and they can benefits from economies scale.
  2. capital conservation - Outsourcing allows companies to conserve their capital by not having to invest in new equipment, technology, or training
  3. perfomance improvements -outsourcing to specialised providers can lead improved perfomance, efficiency and quality as they bring expertise and best practises to the table.
  4. access to low cost labor or resources - Outsourcing can provide access to specialized labor and resources that may not be available in-house
  5. benefits from outside expertise - Outsourcing can provide access to specialized expertise and knowledge that may not be available in-house.
46
Q

reasons to make instead of buy

A

1.greater assurance of supply- they have greater control over the production process.
2. low cost - in house production can be more cost effective for critical components as companies can avoid markups and minimise transportation costs
3. to take advantage of unused capacity - a company can use that capacity to make instead of buying as it can reduce waste and increase efficiency .
4. avoid supply dependancy - buy making they can reduce the dependance on supply and mitigate risk of supply disruptions
5. reduce risk - reducing risk associeted with theft and quality issues.

47
Q

reasons to buy instead make

A
  1. reduce risk - outsorcing can transfer risk to suppliers allowing companies to focus on their core competencies
  2. cost accuracy- it can provide more accurate cost estimates, as the company is not responsible for the costs of production, such as labor, materials, and overhead.
  3. flexibility- outsorcing allow companies to quickly respond to chandes in demand and market condition
  4. excess production capacity - outsorcing can help utilize existing resources and increase efficiency.
  5. lack of and managerial and technical experience. - if the company lacks neccessary experctise and resources to produce a compoent or product, outsourcing to a specialised supplier can ensure high quality output
48
Q

risk of outsorcing

A
  1. loss of control - the company may lose control over the production process.
  2. higher exit barriers - outsorcing can create dependence on the supplier making it challenging to terminate the contract if needed.
  3. exposure to supplier risks - such as financial instabilitlity
    4.unexpexted or anticipated costs- it can lead to unforeseen costs such as hidden fees
  4. supply restraints - it can lead to limited capacity quality issues or logistics challenges.
49
Q

forms of inventory

A
  1. raw materials, purchased parts and packaging
  2. work in progress
  3. finished goods
  4. Maintenance Repair and Operations items
  5. resale items
50
Q

functions of inventory

A

1.transit/pipeline- it takes time to move product
2. cycle - demand pattern does not equal supply pattern
3. buffer- customer service levels must be maintained
4. anticipation- helps companies prepare for expected changes in demand
5. decoupling - helps to reduce the risk of disruptions or delays

51
Q
A

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