L4M1 LO1 Part 1 Flashcards
Q1C1
Full Q: What is Supply Chain Management (SCM)? Outline drivers, advantages & disadvantages of using this approach within the Procurement Department of an Organisation. (25 marks)
Note: Answer as an Intro of Essay & must only be SCM, nothing about Tiers inc.
- Process arrangement
- In Production & Distribution G/Serv. (Exp. each)
- Origin point -> End-consumer
- E.g. Potato (Exp. Farmer -> End consumer)
- Relies on Close Relationships bet. parties in SC
- AV to product @ each stage
- SCM`s specific config. = TSC
Q1C2
a) What is Supply Chain Management (SCM)?
Note: Answer as an Intro of Essay & only TSC
- TSC = Tiered Supply Chain
- Multiple LVLs Supp. & Sub-S
- A buyer work with few Tier1 supp.
- In turn works with their own suppliers
- Many layers of Supp. in Tiered Sys.
- Leads to same product creation
- Essay explores Drivers + Adv. + Disad.
- Of implementing complex SC
- E.g. TSC Model
Q1C3
Outline the drivers of using SCM approach
- Main Drivers of using TSC
- Pursuit Effi. + Cost Effectiveness + Flex.
- By having supp. in distinct tiers
- Org. can Streamline their mang. processes
- This reduces complexity
- Enhance overall SC performance
TSC is employed as response to:
- Global nature of modern business
- Accommodate the need to source materials
- From various regions
- Maintaining Mang. + responsive SNet
Q1C4
Outline the Advantages of using SCM approach
- TSC Adv. is streamlined management of (SMo) suppliers
- In this model, fewer direct suppliers to oversee
- Simplifies coordination and communication processes.
- This increased efficiency and responsiveness
- As Orgs deal with smaller + manageable pool of suppliers.
- Having suppliers in a tiered system
- cost savings
- Improved collabs with a select group of trusted partners.
Q1C5
Outline the Disadvantages of using SCM approach
- Disad. = TSC`s complexity
- Drawback = reduced visibility
-As SC <-> Across multiple tiers
- Orgs struggle view of entire process.
- Lacking visibility challenges is tracking and responding to potential disruptions
- Ethical risks emerge when companies have limited oversight over lower-tier suppliers.
- Exposing Orgs to issues:
- labour exploitation
- Environ. concerns,
- Ethical standards violations.
Q1C6
Give conclusion on SCM approach
- SCM evolved into a complex discipline
- Due to globalization + consumer demands forces
- For speed and Qual.
- TSC model presents both Adv. + Disad.
- Mang. fewer suppliers can enhance efficiency
- But reduce visibility and increased ethical risks.
- Orgs must evaluate their specific operation needs.
- Weigh Benefits vs challenges on TSC adoption
- For sustained success in the global marketplace
- Must balance complexity + efficiency
Q2C1
Give as a list FOUR differences between traditional Proc. & SCM, respective approach.
- Each approach`s objective
- 5R`s vs AV
- The approach
- Reactive buying vs Proactive ordering
- Way of Working (WoW)
- Silo W vs Cross-Func. (C-F) W
- Relationships with suppliers
- Transactional vs Collab.
Q2C2
Question 2: Describe the main differences between a traditional procurement approach + SCM approach to buying (25 marks)
Give Intro of Procurement (Proc.) and SCM
- Reps. 2 distinct approaches +
- Purch. practices evol.
- To acquiring goods
- Proc. = Straightforward purchase of goods
- SCM is longer + more complex
- Has globalized SCs.
- Essay explores the main differences between these two approaches
- Via their objectives, methods, WoW, and supplier relationships.
Q2C3
Describe difference between Proc. & SCM approach, in terms of:
Objective of each approach
- Proc. Objective = Achieve “5 Rs”
- Get right goods, in right V-Z(price)
- Ensures Effi. process
- SCM Objective is AV to entire SC
- Involves close SuppRela.
- Ensures Sust. + Org. goals alignment.
- E.g. company using Proc. approach emphasize getting lowest price
- But, SCM approach is working with suppliers
- Enhancing product innovation or reduce Environ. impact.
Q2C4
Describe difference between Proc. & SCM approach, in terms of:
The approach (reactive / proactive)
- Proc. is reactive buying
- Responds to immediate needs or demands
- Buying as required, without long-term Strat.
- SCM is proactive ordering
- Via anticipate future needs and trends.
-E.g. A company using SCM might use demand forecasting - For better planning + Inv. Mang.
- Proactive approach prevents stockouts
- Red. Costs + ^ overall SC efficiency.
Q2C5
Describe difference between Proc. & SCM approach, in terms of:
Ways of Working
- Procurement = silo W
- Diff. deps. operate independently
- Proc. team not collaborate closely with other departments
-E.g. Production or Marketing - SCM = C-Func. W
- Destroys deps. barriers
- Encourages integrated approach
- E.g. SCM team W closely with production
- Ensure Mat. aligned with Manu. schedules
- ^ efficiency and ↓ disruptions.
Q2C6
Describe difference between Proc. & SCM approach, in terms of:
Relationship with Suppliers
- Proc. = Transactional
- Focus: Exc. of Goods for £££
- SCM promotes collab.
- Emphasise long-term partnerships
- Company with SCM work closely with suppliers
- Improve processes + share info. +
- Address issues jointly
- E.g. SCM approach inc. collab. with suppliers
- Implement just-in-time inv. systems,
- Leads to Csave + ^ responsiveness.
Q2C7
Conclusion for:
Question 2: Describe the main differences between a traditional procurement approach (app.) + SCM approach to buying (25 marks)
- Diff.bet. Proc. & SCM are substantial and nuanced.
- Proc. approach suits smaller Orgs
- Means low-value and low-risk purchases -
- Large Orgs. with complex SC -> SCM app.
- Diff. allows companies to tailor their app.
- Based on their unique circumstances
- Shows importance of Flex. and Strat.
- In alignment with Orgs.` goals
- In this evolving buying + SCM landscape
Q3C1
Question 3: Describe what is meant by the 5 Rights of Procurement (25 points)
- Procurement is balance of acqui. G/Serv.
- @ Right V - Z
- Essay explains 5R`s of Proc. importance +
- Assists Proc. to make smart choices
- E.g. for G/Serv. purchases
Q3C2
Describe Price
- Not cheapest option
- Finds Prod./Serv. @ affordable £££ +
- Not compromise Qual.
- E.g. Office furniture (chair)
- Seek supplier offering balance bet. C & Qual. - Ensure it`s VfM + considerations in…
- TCO + Price Iceberg, Whole LC &
- Furniture longevity
- 1 yr cheap chair vs 10yr lasting chair
- For best price
Q3C3
Describe Quality
- It looks @ Legal compliance (LC) + FitFP
- For intended purpose + maintains satisfactory condition meET
- Qual. adherence alignment
- LC = SoG Act `79
- FitFP = Specs.
- Buyers uses QCon & QAss to meet demand Qual.
- Ensures LC + Customer Satis.,+ Brand rep.
- Fulfilling ethical sourcing policies.
- E.g. Org buys washing machine
- Conforms to ISO standard 97.060
- 2-year warrantee
Q3C4
Describe Quantity
Use Cake manufacturer as example
- Strat.Cons. how much of an item to order.
- Impact Inv. Mang. efficiency
- Economic Order Quantity (EOQ)
- It`s Proc. tool to order RQuan. of a product +
- By Equil. bet. CofSholding + shun stockouts.
3 pivotal roles to find RQuan.
- Market Conds. + Org. policies
- SC dynamics (e.g. JIT / Lean manufacturing)
- E.g. Eggs -> Cakes Manu.
- Right no. of eggs to make cakes
- Cons. inc. no. eggs needed to make cakes +
- When eggs (can) expire / Shelf life or not really needed.
- Use MRP system for determining Prod. Quan. to order.
Q3C5
Describe Time
Use Cake manufacturer as example
- Get things when we need them.
- Egg delivery timing to Manu. pivotal to cakes made on time
- It`s ToEssence
- Other Cons. Δ market forces and customer demand.
- Use forecasting for product demand peaks
- E.g. toys @ Christmas.
- Orgs. must consider Lead + delivery time
- Especially for making/placing orders
- To avoid bottlenecks and production
Q3C6
Describe Place
Use Cake manufacturer as example
- Get things to R.loc. + to achieve it…
- While ↓Environ. impact +↓ Transit risks
- Inc. optimising warehousing practices
- Crucial for perishable + SSCond. items.
- E.g. food + Chems (Specific storage Cond.) - Achieved via logistics, good planning
- Inc.↓ Environ.impact via transport +
- Safety Cons.
Q3C7
Give Conclusion for:
Question 3: Describe what is meant by the 5 Rights of Procurement (25 points)
Prior to concluding the 5Rs, should admit:
-Addl Rs are ackledged
- From evolving models
- E.g. Right Rela.withSupp
- 5Rs Prov. StructFram.
- Optimises Org sourcing practices.
- This ensures OpsEffi.
- All Rs + RelaBet. Rs
- Are important +
- Forms a foundation.
- Aids Sust. + EthiCon`ct
- Throughout Proc. process
- Gives L-term success
- In this global dynamic marketplace.
Q4C1
List 4 ways the Procurement Department can add value for their organisation
- Improving + Updating Specs
- Streamlining processes
- Mang. Supp. Rela.
- Improve Qual. & Innov.
Q4C2
Question 4a) Explain what is meant by added value (AV) (5 points).
Relate to Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
- Proc. AV is P/Serv. enhancement or improvement
- It`s in Econ. worth, Qual., or utility
- It`s before being offered to customers or end-users
- Goal is > Obtain G/Serv. @ lowest C£
- AV to Org. via various means
- Essay explores AV +
- 4 ways Proc. Deps. (PD) can contribute to Org. improvement
Q4C3
Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
Give 1st Way (Imp. Spec.)
- Improving Specifications
- Ensure all critical items are procured against a Spec.
- Which`s regularly improved + updated
- E.g. PD procuring office light-bulbs
- Have effective Spec. for this purchase
- E.g. bulbs must meet X safety Stand. +
- Y environmental Stand.
- For Org. ↓ in crazy buying +
- Procure better-Qual. product.
- Regular Spec. update ensures u-t-d with current safety Stand. + Regs.
- E.g. Use of low-energy / High Effi. lightbulbs
- Crucial for future purchases
- No Spec. update = ↑ risk of item bought
- Not meet the correct standards
- AV here is removing risks
- Of procuring wrong item
Q4C5
Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
Give 2nd Way (S-Lining P)
- Stream-lining Processes
- AV via stream-lining processes
- E.g.1. Requisitions + POs
- ↓ time to procure an item + Csave
- E.g. Routine Stationary items
- E.g.2. Buying items via re-order process
- Already have buying experience….so…
- Automated order when stock levels reach a certain level.
- E.g. Org. staff must wear certain PPE
- AutoReQ. made once there are only 50 face masks left.
Q4C5
Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
Give 3rd Way Managing Supplier relationships (Mang. Supp. Rela.)
Managing Supplier Relationships (Supp.Rela.)
- AV source: Strong +ve Supp. relationships
- Means Supp. values you as a buyer
- Help in adversely affecting business situs.
- E.g. Manu. puts incorrect order (300 items)
- Strong Rela. = Supp. allow order amended
- Poor rela. = Supp. not as flexible.
- SC Flex. is AV source
Q4C6
Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
Give 4th Way - Improving Qual./Innov.
Improving Quality / Innovation
- It`s AV from customer’s perspective
- E.g. purchase phone with longer battery life
- PD should complete Value Engineering
- Or procure higher Qual. Comps./Mat.
- @ same £P to achieve Add`l feature.
Q4C7
Question 4b) Describe 4 ways the Procurement Department can add value for their organisation (20 points)
Give Conclusion
- PD is essential to Org. success by AV
- Via improved Specs., S-Lined processes
- Strong Supp.Rela.+Improv. Qual. and Innov.
- These ↑Effi. + ↓risks +
- ↑ customer satisfaction
- It shows Proc. + PD`s
- Contibution + Diff.`ce
- On Org Success
Q5C2
Question 5: Bob is a procurement manager at ABC Ltd. He has been asked to ensure all future purchases achieve ‘value for money’ for the organisation. What is meant by ‘value for money’? (5 points). Describe 4 techniques that Bob could use to achieve this (20 points)
*Don`t forget to inc. Bob in answer
- VFM: concept to obtain best RoI
- Or benefits relative to Cincurred.
- Assess G/S/Activities provided
- On whether optimal balance offered
- Bet. £C + Qual. + benefits
- Or outcomes they deliver.
- VFM is not cheapest option
- It considers Overall Effi + effectiveness
- Inc. L-term value from expenditure
- In essay, show four key techs
- For Bob to achieve this for all future purchases.
Q5C1
4 techniques to achieve VFM
- Value Engineering (Val.Eng.)
- Consolidate demand (ConDem)
- International Sourcing (InterSource)
- Whole Life costing methodology (WLCMet)
Q5C4
Give 2nd technique to achieve VFM
ConDem
Consolidate demand (ConDem)
- Bob can achieve VFM by ConDem @ ABC.
- Is Group, not independent buying
- Bob creates centralised process
- For bulk ordering items + Deps. to share.
- E.g. Each deps. require stationary ordered
- Bob can ConDem + create 1 big order
- Per Quarter + results ABC Csave
- As supp. offer discounts for large orders
- ConDem allows time savings
- Ensure 1 person does work than 20
Q5C4
Give 1st technique to achieve VFM
Val.Eng
Value Engineering
- Look @ Prod. Mat. +Comps.
- Evaluate + Assess each value
- If no AV -> Eliminate
- If Better avail. = Replace
- Find Prod. parts to be omitted -> Csave
- Or replace with higher Qual. Comps.
- @ same £P + AV to customer
- E.g. Bob completes Val.Eng. on new phone
- To release next year
- Finds way to provide a higher Qual. Cam
- @ no Add`l £C
- Or finds no AV components to omit
Q5C5
Give 3rd technique (Tech.) to achieve VFM
International sourcing (InterSource)
International sourcing
- Bob finds VFM in Δsuppliers +
- Looking @ InterSource
- Other countries can offer same Prod.
- @ low £C
- E.g. Bob looks @ Manu. G/ from China
- Csave by looking at InterSC
- Bob must ensure this Tech. doesn`t ↓Qual.
Q5C6
Give 4th technique (Tech.) to achieve VFM
Whole Life Costing methodology (WLCMet.)
Whole Life Costing methodology
- Tech. Bob can use to procure CAPEX items
- Looks @ item`s lifecycle £C
- Not only InitPurch. £P
- E.g. Bob procures new delivery truck
- Consider not only £P-truck
- Must inc. £C- truck insurance + £C-disposal
- Also £C-replacing parts
- Considering these factors ensures…
- He buys truck that is VFM L-term.
Give Conclusion to:
Question 5: Bob is a procurement manager at ABC Ltd. He has been asked to ensure all future purchases achieve ‘value for money’ for the organisation. What is meant by ‘value for money’? (5 points). Describe 4 techniques that Bob could use to achieve this (20 points)
*Don`t forget to inc. Bob in answer
- Bob must ensure he uses four Techs.
- For all future items he + his team procures
- Ensures ABC achieves + maximises VFM
- To remain competitive in marketplace.
