Lecture 6 Flashcards
Three ways to drive
Lease
Purchase
Subscribe
Lease
- lower monthly payments
- upgrade to new vehicle when lease is up
- customizable to your budget
purchase
- no mileage restrictions
- no monthly payments
- available through overseas delivery
subscription
- can subscribe online
- all inclusive rate
- insurance, service, and maintenance included
- can upgrade to a new car in as little as 12 months
- more flexible than leasing
light as a service
- a company provides lightning (light bulbs, lamps, etc)
- leads less material waste
- more cash savings
power by the hour
- rolls Royce service of offering plane engines
- charges by the hours flown not by the entire engine
- can be used in planes from other companies
- accessory replacement service
performance based contracts
emphasizes the value of the transaction for the customer, and relates to it the compensation of the supplier
can be measured in nonmonetary units or monetary units
PBC compensation models
Pay on availability
Pay on use
Pay on qualitative outcomes
Pay on economic results
Pay on availability
assets
limited risk to supplier
more certainty to customer
Pay on use, pay per unit
services from assets
less volume risk
pay based on quantity
more flexible
Pay on qualitative outcomes
for the customer
e.g effect of the professors evaluation on his payment
KPN Atos
Pay on economic results
monetary value of the output
royalties, license fees
Objectives of PBC
stimulating innovation
improving quality performance
lowering cost
Stimulating innovation
long term contracts
use functional specifications
process innovation vs. product innovation
improving quality performance
durability, functionality, sustainability
customer –> define and measure right KPI’s
lowering costs
tension: reduce turnover supplier
Suitable services for PBC
performance (output/outcome) is measurable
performance not highly dependent on external conditions
Performance measurable
validly
reliably
efficiently
performance not highly dependent
other suppliers
buying organizations
final customer
KPN behavior measurable and accountable
supplier performance dependent on client:
- clear specifications
- transparency demand fluctuations
- compliance with single sourcing contract
supplier satisfaction surveys
not link to product
not linked to financial incentives
one off, ad hoc
Ethics
it is justice
moral principles between right and wrong
Society & ethics
defines it based on behavior
sound moral principles of justice fairness and trust
Importance of ethics in purchasing
important in CSR
success of supplier-buyer relationship –> based on ethics orientation
Procurement & CSR
purchasing behavior defines the tone for all following events
ethical risks
ethical issues caused by competing goals and objectives of buyers-suppliers
buyers
want best quality at lowest price
supplier
want the most profit
Code of conduct - core principles UN
loyalty and respect to rules due diligence confidentiality transparency, fairness, impartiality integrity avoidance of appearance of impropriety
Effectiveness of codes of conduct
when content of of code is comprehensive there is a higher compliance to ethical regulations
Effectiveness of codes of conduct 2
focus on content of codes
document based vs. content comprehensiveness
Main forms of ethical risks in procurement
conflict of interest fraud corruption coercion collusion
conflict of interest
private interests affect a buyers actions and decisions
actual, perceived, or potential
fraud
act that misleads the other party to obtain a financial benefit
corruption
accepting gifts in return of favorable treatment
coercion
act that harms a party to influence the actions of that party
collusion
arrangement between two parties to achieve an improper purpose
