L4 8 Flashcards
L1
What are the stages of the CIPS procurement cycle?
- Understand the need
- Market or commodity
- Develop strategy
- Pre procure
- Develop document
- Supplier selection
- Issue RFQ/ITT
- Bid or tender
- Contract award
- Warehouse logistics
- Contract performance
- SRM and SC management
- Asset management
On what 2 areas can specifications be focused?
Performance or conformance
What do Perfomance specification state?
It state what the product or service must do or how it should perform but leave the supplier the freedom to achieve this however they wish
Conformance specification?
Give clear instructions to the supplier about what is required and how it should be achieved. Eg chemical formulae, recipes and technical drawings
What are the differences between performance specifications and conformance specifications?
Perfomance
Allow supplier innovation Promote competition in the market place The supplier bears the risk Buyer may not know exactly what they will be getting Shorter document Quicker to prepare Takes advantage of supplier expertise
Conformance
No supplier innovation
Reduce competition
The buyer bears the risk
Buyer knows exactly what they are getting
Longer, complex document
More time consuming to prepare
Disregards supplier expertise
Porters Five Forces
RIVALRY AMONG EXISTING COMPETITORS
- Threat of new entrants
- Bargaining power of suppliers
- Threat of substitutes
- Bargaining power of buyers
A procurement professional can use Carter’s Outsource Matrix when deciding whether to make or Buy. Identify the 4 stages of the Matrix
- Strategic alliance
- Retain
- Eliminate
- Outsource
What is outsourcing?
Contracting an external company to supply goods or services that were once produced internally.
What are the benefits of Outsourcing?
Saving money
Reducing overheads
Reducing headcount
Using external knowledge
Focusing internally on core competencies
Helping with shortfalls in labour expertise
What are the disadvantages of Outsourcing?
Losing some control within an organisation
Relying on external organisations
Reducing quality
Losing some internal knowledge
Name the STEEPLE themes
Social Technological Economic Environmental Political Legal Ethical
What is STEEPLE analysis used to do?
It is used to evaluate the external environment. This helps buyers to assess which factors could affect their need and helps them to develop the plan accordingly.
What does SWOT analysis comprise?
Strengths- areas that perform well within an organisation
Weaknesses- areas that need improvement- lack of skills/resources
Opportunities- areas outside the orgn that could contribute favourably or help with success
Threats- areas related to external factors that could pose problems for the organisation
Supplier selection
Suppliers can be evaluated according to Carter’s 10Cs, which are as follows;
Competency Capacity Consistency Control Cost Commitment Cash Clean Culture Communication
A requisition can take the following forms
Verbal
Handwritten
E-mail
Automated
MRP systems generate requisitions for procurement based on the activity within the manufacturing organisation. Which elements are included?
Bill of Material (BOM)
Minimum Order Quantity MOQ
Current stock levels
Sales demand or planning run
Cycle time
Lead time
Market analysis and testing
What is included in analyzing and testing the market?
STEEPLE analysis SWOT analysis Porters five forces Levels of supplier competition Supply and demand Push and pull Supplier segmentation Product life cycle Ansoff matrix Early supplier involvement Make or buy Offshoring
Supplier evaluation
What other factors are considered when evaluating suppliers?
PRRECCBS
Pre-qualification questionnaires Carter's 10Cs Credit checks Ethics Sustainability Benchmarking Relationships
What is the purpose of a Tender?
To invite potential suppliers to bid to supply a product or service to the buying organisation
Name the 7 stages of Tendering process?
- Decide which style of tender to use
- Prepare invitation to tender
- Send ITT
- Buying organisation receives bids
- Evaluate bids
- Award contract and give feedback
- Contract management
Name the 4 types of tender used within the procurement?
Open
Restricted
Negotiated
Competitive dialogue
What are some of the ways which can be used to conduct supplier management?
Credit checks
Key Perfomance indicators
Service legal agreements -agreements btn the buyer and the supplier that define the level of service that is expected throughout the contract
Audits
Benchmarking
