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purchasing shit > first lecturre > Flashcards

first lecturre Flashcards

1
Q

Definition of Purchasing

A

Some scholars say it is managing a product/service, being:
▪ at the right time
▪ in the right quantity
▪ at the right place
▪ of the right quality
▪ for the right price

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2
Q

different types of chains to networks

A

internal chain, dyadic relationship, external chain, network

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3
Q

ROI (Return on Investment)

A

This measures how much money you make compared to what you invested. For example, if you invest $100 and earn $150, your ROI is 50%. It’s a way to see if your investment was worth it.

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4
Q

Asset Turnover

A

This shows how efficiently a company uses its assets (like buildings, machines, or inventory) to generate sales. If you have a lot of assets but few sales, your asset turnover is low.

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5
Q

Profit Margin

A

This tells you how much profit you make for every dollar of sales. For example, if you sell something for $10 and your profit is $2, your profit margin is 20%. It shows how well you’re controlling costs and making money.

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6
Q

Additional Cost

A

These are extra expenses that come up beyond your usual spending. For example, if you’re manufacturing a product and suddenly need to buy more expensive materials, that’s an additional cost.

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7
Q

Sourcing

A

This is the process of finding and buying materials or products for your business. For example, choosing a supplier for raw materials is sourcing.

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8
Q

Total Cost

A

This is the overall amount of money spent to produce something, including materials, labor, and other expenses.

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9
Q

Profit

A

This is the money left after subtracting all expenses from your revenue. For example, if you earn $500 and spend $300, your profit is $200.

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10
Q

Revenue (Sales Turnover)

A

This is the total amount of money a business earns from selling its products or services within a specific time, like a month or a year.
For example, if a company sells 1,000 items for $50 each, its turnover (or sales revenue) is $50,000.

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11
Q

eu implementation

A

The EU emphasizes scrutinizing supply chains to meet sustainability goals, enhance resilience, and address ethical challenges under initiatives like the Corporate Sustainability Due Diligence Directive. Businesses are urged to map their supply chains, diversify suppliers, and adopt sustainable procurement practices to reduce risks and comply with regulations. This focus ensures transparency, regulatory compliance, and operational resilience, while also aligning with the EU’s Green Deal and circular economy objectives.

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12
Q

purchasing process imply?

A

consists from 6 steps, tactical and operational

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13
Q

what are the 6 steps

A

Make or buy/
Specification
(what)
2.
Consultation/
Selection
(who)
3.
Negotiating/
Contracting
(how)
4.
Ordering
5.
Pay/
Deliver
6.
Monitor
Evaluate

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14
Q

Identifying Needs

A

recognising what goods or service are required to support business operations, determine volume, requirements

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15
Q

supplier selection

A

choosing and evaluating supplier: quality, price,reliabity

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16
Q

negotiating, contracting

A

doing talking talking, negotiating, creating, agreeing on terms, delivery timelines

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17
Q

ordering

A

ordering bro

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18
Q

pay or deliver

A

invoices are reviewed and payment is made according to agreement, once good are inspected

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19
Q

monitor, evaluate

A

evaluating, monitoring supplier reliability, product quality, for future purchases, new contract

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20
Q

first 3 steps are called, and rest

A

sorcing , purchasing, the rest is supply chain management

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21
Q

The purchasing function involves :

A
  • all activities in all phases of the purchasing process
  • all departments that perform these activities
  • all goods / services / work supplied
  • the administrative actions on orders and invoices
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22
Q

Objectives of Purchasing

A

supply assurance, Manage
purchasing process efficiently
and effectively, Supplier
performance
management, Develop
aligned goals
with internal
stakeholders, Develop
integrated
supply
strategies
that support
business
goals and
objectives

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23
Q

supply assurance

A

Buying materials from the right sources
* At the right price
* With specification that meets user needs
* In the right quantity
* Delivered at the right time
* To the right users

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24
Q

manage purchasing process efficiently and effectively

A

Determining appropriate staffing levels
* Developing and keeping within budgets
* Providing professional training and opportunities
* Ensuring high utilization of facilities
* Designing operations that give high productivity
* Monitoring performance and seeking improvements
* Continuously increasing efficiency and effectiveness

25
supplier performance management
* Ensure current suppliers are competitive * Improve and develop existing suppliers, (particularly those falling behind) * Identify new suppliers who can already join the supply base * Develop new potential suppliers whose performance is not yet good enough to join the supply base
26
align goals with internal stakeholders
* departments that are included departments, from procurement and production to sales and finance, all working collaboratively to optimize operations Internal customers as stakeholders * Strong two-way communication * Cross-functional coordination and collaboration * Positive, problem-solving relationships
27
develop integrated supply strategies that align with goals
Alignment of functional goals with organizational goals * Mutually-supportive, not counter-productive * Purchasing’s substantial impact on the organization’s performance * Purchasing as a strategic core competency
28
what is the wheel called
the strategic supply wheel, Cousins 2002
29
5 parts
organisational structure, portfolio of relationships, performance measures, skills and competencies, total cost
30
what is in the middle
the development of supply policy and supply strategy
31
purchasing practice
buying the correct goods and services for the organisation, at right price, quality, time
32
first contributor in studying supply management
David Farmer in 1970- purchasing in the link with main strategic decision making process
33
David Burt and Hal fearon
investigated the role of purchasing in the whole business and its success
34
1980 what changed
firms started focusing on their supply chain
35
supply chain strategies
outsourcing, supply chain restructuring and partnership
36
what is purchasing
strategic business function that balances quality, costs, quality, time
37
materials management
describes the movement of components and materials within the factory or firm
38
outbound
Outbound logistics refers to the processes involved in storing, transporting, and delivering finished products from a company to its customers or end-users.
39
inbound
Inbound logistics refers to the processes of managing the transportation, storage, and delivery of raw materials, components, or goods from suppliers to a company's manufacturing or storage facilities.
40
evolution first purchasing was seen as
before clerical role as in documents to a strategic function
41
what did logistics focus on before
before only within factories, but then change into inbound, materials management, outbound
42
1970 purchasing what
administrative no strategy
43
1980
EMERGENCE OF SUPPLY chain, JIT production, total quality management, collaborative supplier management
44
just in time and total quality management
Just-In-Time (JIT): A production and inventory management strategy that minimizes waste by receiving goods only as they are needed in the production process, reducing storage costs and improving efficiency. Total Quality Management (TQM): A business approach focused on continuously improving processes, products, and services by emphasizing quality at every stage and involving all employees in achieving customer satisfaction.
45
1990
purchasing aligned with corporate strategy, strategic outsourcing, supplier development, total cost of ownership
46
TCO AND ENTERPIRSE RESOURCE PLANNING
Total Cost of Ownership (TCO): The complete cost of acquiring, operating, maintaining, and eventually disposing of a product or service over its entire lifecycle, helping businesses make more informed purchasing decisions. Enterprise Resource Planning (ERP): A software system that integrates core business processes (like procurement, inventory, finance, and HR) into a unified platform to improve efficiency, data sharing, and decision-making across the organization.
47
now?
sourcing, outsourcing, supply chain optimisation, competitivenes, cost reduction
48
what had a big impact
PEST
49
WHAT each had an impact
political shifts- privatisation economic pressures- globalisation, competitive social pressures- ethical technological- data analysis
50
three types of purchasing strategy
-purchasing function implements competitive strategy -purchasing function supports strategy of other functions and those of the firm as a whole -purchasing function drives strategy of the firm
51
the three steps of strategy
implementing strategy, supporting strategy , driving strategy
52
4 stage model strategy purchasing
reck and long
53
the 4 stages
passive, independent, supportive, integrative
54
the different types of supply structure evolving
dyadic, chain, network
55
the three approaches to strategic supply
Process-Based Approaches: Focus on organizational processes like skill development, competencies, and information systems that enable effective strategy implementation. Procedures-Based Approaches: Emphasize organizational procedures such as performance measurement and cost–benefit analysis to ensure strategies are executed efficiently. Policy-Based Approaches: Concerned with the formulation of strategy itself, acting as the "hub" that ensures cohesion and alignment across the organization.
56
5 key points
Alignment of Corporate and Supply Strategy Skills and competencies Org structure STrategic performance measures cost benefit analysis relationship portfolio
57
three important strategies
1) determine main goals 2) inside out 3)inside in
58
the types of strategies
business, corporate, functional leveů
59

purchasing shit (2 decks)

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