Föreläsning 1

Question 1

what is an entity within a company called?

Answer 1

A functional group

Question 2

What’s the difference between purchasing and procurement?

Answer 2

purchasing is more transactional (the actual act of buying something) Functional group/department and activity, for example buying goods or services).

Procurement more strategic, long term action (picking the right supplier long term).

Question 3

What type of advantage comes from purchasing, supply chain management and strategic sourcing?

Answer 3

Purchasing seeks advantage for our organization. Supply chain management seeks advantage for the whole chain. Strategic sourcing seeks sustainable advantage.

Question 4

What’s the difference between value chain and supply chain? What is reverse supply chain?

Answer 4

Value chain (The value chain framework is made up of five primary activities – inbound operations, operations, outbound logistics, marketing and sales, service) is broader than the supply chain, includes also secondary value-creating parties (procurement and purchasing, human resource management, technological development and company infrastructure.)

Supply chain contains the flow of products, information and finances and is therefore the subset of VC.

Reverse supply chain – identifying and returning of tainted products back through the supply chain.

Both value and supply chain can be very simple and very complex

Question 5

What is the percentage of purchasing to sales?

Answer 5

Purchasing is a big area for cost savings. On average 55% of sales goes back to the suppliers (US).

Question 6

Why is supply chain management important?

Answer 6

• Increasing value and savings;
• building relationships and driving innovation;
• improving quality and reputation;
• reducing time to market;
• managing supplier risk;
• generating economic impact;
• contributing to competitive advantage.

Question 7

what is the double savings effect?

Answer 7

Let‘s say that purchasing costs are 50 of total sales 100, labour is 20 and the profit is 10. When we lower the purchasing costs by 10% (5), the profit is 50 % higher (by 5)! To reach the same result, we would have to lower the labour costs by 25 %. In practice, this would allow us tor each better prices for the customers, and reach another competitive advantage. This is sometimes known as the double saving effect

Lowering purchasing costs and increasing profit. Better prices for the costumer but lower labour costs.

Question 8

Compared to other methods of savings, how effective is purchasing?

Answer 8

Purchasing is 3-5x more effective in comparison with other methods of savings (such as lowering the personnel costs)

Question 9

Why is the double savings effect controversial?

Answer 9

CAN WE SAVE 10 % REGULARLY? EACH YEAR?
CAN WE „STEAL“ THE SAVINGS REACHED BY OTHER DEPARTMENTS (MANUFACTURING, R&D)?

Question 10

Which are the supply chain enablers?

Answer 10

1. HR, people with different skills
2. Organizational design, what structure will we use centralized/decentralized
3. Information technology, internet of course, robots, AI
4. Measurement