L4M6 Book Flashcards

1
Q

Remember

A

An Internal supplier normally produces products and services that are core to the organisation - Make or buy decision if the internal supplier will carry out the work or will they outsoure it.

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2
Q

Remember

A

When making a decision to use an external supplier the buyer must evaluate all of the risks carefully - advantages are disadvantages to external suppliers there may be long delivery times. Natural disasters etc. Positives are they are experts in the field. May be more cost effective(economies of scale). Small volumes etc. ESG (Environmental , Social and Governance (a measurable sustainability assessment.

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3
Q

Remember

A

When negotiating, a buyer will use different tactics depending on the relationship it wants to establish with the supplier - kraljic matrix matches up with steel and court supplier matrix. As the reltionship increases different tactis used. may establish win win relationships.

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4
Q

Remember

A

There are eleven types of relationship that make up the CIPS
Relationship Spectrum. As you move from left to right on the spectrum the level of closeness and collaboration increases.

Adversarail relationships
Arms length
transactional Relationships
Moderate relationships
Bespoke relationships
Single source realtionships
Outsourced relationships
Strategic relationships
collabrative relationhsips
Partnerhsip relationships.

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5
Q

Apply
Think about the supplier relationships in your current organisation. For five supplier relationships that you have knowledge of, try to locate where you think they would be on the CIPS Relationship Spectrum.

A

On the relationship spectrum

NHT would be high as we have more of a strategic partnership

Arco would be transactional .. small amount on costs no need to contact them much.

Emi seals - single source suppliers .. would be in the middle as we need to keep in contact and maybe order more than usual.

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6
Q

Check
List all eleven types of relationships that make up the CIPS
Relationship Spectrum

A

Low to high

Adversial relationship
Arms length relationship
Transactional relationship
Moderate relationship
Bespoke relationship
Single source realtionship
Outsourced relationship
Strategic relationship
Collaborative relationship
Partnership relationships
Co-destiny relationship

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7
Q

Remember
There are six phases to the relationship life cycle.
* On-boarding
* Qualification
* Segmentation and risk management -
* Performance management
* Development and innovation
* Phase-out (if required)

A
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8
Q

Check
What are the benefits of supplier development for the buyer?

A
  • Can reduce costs for the buyer and supplier
  • Working togther can result in elamination of waste

Buyer may need to undertake supplier actvities if previous supplier had quality issues.

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9
Q

Remember
Pareto analysis and ABC analysis are based on the 80/20 rule.

A

ABC uses a left to right axis. 20% of the products used to manufacture a car will make up 80% of the cost.

A - Items account for 80% of cost 20% volume.

Pareto does not account for market complexitity.

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10
Q

Remember
The Kraljic matrix can be used to develop procurement strategies.

A

333

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11
Q

Remember
The Kraljic matrix has four quadrants - routine, bottleneck, leverage and strategic.

A

The Kraljic matrix has four quadrants - routine, bottleneck, leverage and strategic.

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12
Q

Check
What are the four quadrants of the Kraljic matrix? Can you draw the matrix?

A

Top Left:Leverage
Top Right: Strategic
Bottom Left :Routine
Bottom Right: Bottleneck

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13
Q

Remember

A

In order to segment the supply base the buyer should make a list of all products and services in ascending order of value and then evaluate the risk of supply for each item. Following this, each product or service should be positioned on the matrix and the matrix should be reviewed regularly.

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14
Q

Apply
Think of five products or services that your organisation procures and plot them on the Kraljic matrix. Consider whether your current strategy for procuring these items fits their position in the quadrant.

A
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15
Q

Remember

A

The Supplier Preferencing matrix looks at how the supplier views the relationship with a buyer.

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16
Q

Remember

page 29

A

The supplier and the buyer may not always have the same view of the relationship. This could lead to potential risks for the buyer, especially if the supplier views it as a nuisance or exploitable.

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17
Q

What are the four quadrants of the supplier prefrencing matrix, can you draw the matrix

A

Development
Core
Nuisance
Exploitable

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18
Q

Remember

A

The market management matrix combines the kraljic matrix and the supplier prefrencing matrix

Strategic & Core
Development & leverage
bottleneck & exploitable
nuisance & routine.

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19
Q

Remember

A

The insights provided matrixes should be used to develop supplier relationship management action plans

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20
Q

remember

A

Porter five forces model is made up of the rivalry in the marketplace, the threat of subs, barriers to entry and the relative power of buyers and suppliers

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21
Q

In what cicumstances is buyer poweer likely to be high

A
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22
Q

remember

A

Steepled analysis looks at risks that are external to company

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23
Q

remember

A

Steepled analysis covers the following areas: social, technological, economic, political, legal, ethical and demo

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24
Q

What are the eight elements of steepled analysis, give one exmaple from each of the eight areas.

A

Social - Economy - Consumer spending - Expensive purchases such as cars.
Tech - Improvements in automation may able to improve workforce
Environment - Reducing waste
economic - Sourcing from china gets you better pricing
political - trade deals with the UK and Europe
Legislative - GDPR effects marketing databases
Ethical -
Demographic -

25
Q

Remember

A

The value chain is made up of primary activities and supports activites. The procurement department is a support activity.

26
Q

Remember

A

The relationship between a buyer and a supplier can add value for both parties. Exmamples of the added value include reduced costs and imporved quality

27
Q

Rememeber

A

The value chain key points as follows.

An organisation will add value to its inputs in orider to create value for the customer

this will generate margin (profit) for the COmpany

the actvities in the value chain are interdepoendent; what affects one will affect the other.

Waste across the value chain should be eliminated.

28
Q

Remember

A

following is an easy way to remember the five rights of procurement

Place
Price
Quantity
Quality
Time

29
Q

What is open book costing? What type of relationship are needed with the suppliers in order for them to endorse open book costing

A

open book costing is mainly used with strategic and and collaborative type costing. arms length/adversial would not be something the buyer would engage in.

30
Q

Remember

A

In terms of cost management, procurement can add value via careful specification development, competitive tender, e souricng and negotiations and contract management

31
Q

Review some recent specifications used by your organisation. try to identify whether they are confromance or performance specifications or a mixture of the two

A
32
Q

Remember

A

There are two main types of specification - confromance and perfomance

33
Q

what is value engineering

A
34
Q

Remember

A

Stock holidng can reduce risks but it can also increase cost

35
Q

Remember

A

There are various ways that procurement can add value for the buying organisation through the way it manages and builds relationship with external suppliers. This includes pricing and cost management, ESG (enviromental, social, governance), improving quality, timescales, quantities and place considerations.

36
Q

Chapter 2

A
37
Q

Value for money is not just obtaining a product or service at the lowest price. it is often described as the four “es” economy, efficiency, effectivness and equity.

A
38
Q

Think about the procurment processes and procedures in the business that you work in. Do you think that they support the delivery of the value for money.

A
39
Q

Remember

A

One of the key ways that procurement can ensure value for money is to apply competition to business requirements.

40
Q

The mnemonic TIMWOODS can help you remember the eight wastes

A

TRANSPORTATION
INVENTORY
MOTION
WAITING
OVER PRODUCTION
OVER PROCESSING
DEFECTS
SKILLS

41
Q

REMEMBER

A

Procurment can add value at all stages of the procurement life cycle. the stages are: understand need, market review, develop stratergy, suppleir identification, develop documents, supplier selection, tender evaluation, contract award and contract management.

42
Q

REMEMBER

A

The number of suppliers that are identified in the marketplace will gace a direct effect on the type of procurement processes and procedures used to select suppliers

43
Q

What are the benefits and drawbacks for the buyer and the supplier of undertaking a competitve tender process

A
44
Q

remember

A

Both requests for information (RFI) and (PQQ’s) can be used for the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation.

45
Q

Rememeber

A

Key procurment used in the private sector for supplier selection includfe request for information (rfi) request for proposal (rfp) e-auctions and rounds of negotiations.

46
Q

what are the key elemetns of supplier, slection and evaluation >

A
47
Q

remember

A

key stakeholders should be involved when developing the evaluation and award criteria, this is the case in both the public and private sectors and will ensure that procurement secures value for money.

48
Q

remember

A

it is important to first identify who the stakeholders of a project/procurement are and then to map them based on their level of power/infulence. the extent of their power and intrest will affect how the buyer communicates with each stakeholder group

49
Q

What are the four quadrants of the mendelow matrix ? Draw a quick sketch of the matrix

A
50
Q

Remember

A

Projects and procurement may meet with resistance. the resistance may be due to the fsct that the objectives of the procurement process conflict with anither departments objecgives, or the resistance may be on a personal level. It is important to understand why stakeholders are resistance in order to be able to move them to a position where they accept the change and perhaps even support it.

51
Q

Search on the internet for the kübler ross change curve model read through the stages. Can you think of an example where you have gone through an experience of change? how could the stages outlined in the model have been applied.

A
52
Q

remember

A

The kubler ross curve can help us to understand the stages that stakeholders pass through during a time of change. these key stages are shock =, denial, frustration, depression, experiment, decision and integration.

53
Q

Undertake a force field analysis excercise for a procurement projects that you are currently working on.

A

Force field is where

54
Q

remember

A

there a re five methods that can be used to manage conflict situations. there are avoiding, comprising, accomadating, competing and collorating.

55
Q

remember

A

corss organisational teams are generally used ti manage karge, strategic procurmenets or projects =, the project will benefit from the synergies by the group, which may even involve suppliers.

56
Q

An organisation is planning on souring and implementing team is being formed to manage the process. who would you include in the team and why

A
57
Q

Tuckmans model of team development has five stages -

page 93

A

forming
storming
norming
performing
adjourning

58
Q
A