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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
Q

supplier performance management

A
  • 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
Q

align goals with internal stakeholders

A
  • 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
Q

develop integrated supply strategies that align with goals

A

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
Q

what is the wheel called

A

the strategic supply wheel, Cousins 2002

29
Q

5 parts

A

organisational structure, portfolio of relationships, performance measures, skills and competencies, total cost

30
Q

what is in the middle

A

the development of supply policy and supply strategy

31
Q

purchasing practice

A

buying the correct goods and services for the organisation, at right price, quality, time

32
Q

first contributor in studying supply management

A

David Farmer in 1970- purchasing in the link with main strategic decision making process

33
Q

David Burt and Hal fearon

A

investigated the role of purchasing in the whole business and its success

34
Q

1980 what changed

A

firms started focusing on their supply chain

35
Q

supply chain strategies

A

outsourcing, supply chain restructuring and partnership

36
Q

what is purchasing

A

strategic business function that balances quality, costs, quality, time

37
Q

materials management

A

describes the movement of components and materials within the factory or firm

38
Q

outbound

A

Outbound logistics refers to the processes involved in storing, transporting, and delivering finished products from a company to its customers or end-users.

39
Q

inbound

A

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
Q

evolution first purchasing was seen as

A

before clerical role as in documents to a strategic function

41
Q

what did logistics focus on before

A

before only within factories, but then change into inbound, materials management, outbound

42
Q

1970 purchasing what

A

administrative no strategy

43
Q

1980

A

EMERGENCE OF SUPPLY chain, JIT production, total quality management, collaborative supplier management

44
Q

just in time and total quality management

A

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
Q

1990

A

purchasing aligned with corporate strategy, strategic outsourcing, supplier development, total cost of ownership

46
Q

TCO AND ENTERPIRSE RESOURCE PLANNING

A

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
Q

now?

A

sourcing, outsourcing, supply chain optimisation, competitivenes, cost reduction

48
Q

what had a big impact

A

PEST

49
Q

WHAT each had an impact

A

political shifts- privatisation
economic pressures- globalisation, competitive
social pressures- ethical
technological- data analysis

50
Q

three types of purchasing strategy

A

-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
Q

the three steps of strategy

A

implementing strategy, supporting strategy , driving strategy

52
Q

4 stage model strategy purchasing

A

reck and long

53
Q

the 4 stages

A

passive, independent, supportive, integrative

54
Q

the different types of supply structure evolving

A

dyadic, chain, network

55
Q

the three approaches to strategic supply

A

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
Q

5 key points

A

Alignment of Corporate and Supply Strategy
Skills and competencies
Org structure
STrategic performance measures
cost benefit analysis
relationship portfolio

57
Q

three important strategies

A

1) determine main goals 2) inside out 3)inside in

58
Q

the types of strategies

A

business, corporate, functional leveů

59
Q
A

purchasing shit (2 decks)

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