M4 Flashcards
Identify the two types of “sourcing” and four characteristics of each type.
1.1
Tactical Sourcing - Short term and transactional in nature.
Strategic Souricng - Focuses on aligning procurment decisions with buisness stratergy.
- Explain the term outsourcing and identify six reasons why an organisation may decide to do this.
Outsourcing - Contracting certain business functions to external providers. they may do this so they can:
Cost saving
Focus on core competitors
flexibility and scalability
risk management
Time Saving
Advanced tech
- Identify the market analysis tool that uses forces to identify the level of competition within a market.
Porter Five Forces
- Identify each of the forces.
Bargaining of Buyer
Bargaing of supplier
Threat of new entrants
Rivalry
threat of substitues.
- When considering the make or buy decision – identify five arguments/factors for “make” decision.
Make decision:
Improved quality control
Reduced risk
Continius supply
Buy Decision
No capacity in house
reduced overheads
Advanced Tech that “make” do not have.
- Identify and explain the model that can be used to recognise external factors that affect the market.
STEEPLED
Social
Tech
Economic
Enviroment
Political
Legal
Ethical
Demographic
- Explain the term “intracompany trading”.
Different subsidaries within the same umbrella company.
- Identify and describe four other procurement structures
Decentralised - Individual locations are responsible for their buying activity
Centre led action network - Policy is determined by the centre.
Strategically controlled action network - centre sets stratergy and has control in local markets.
Distributed Network - no defined centre.
- Explain the term “transfer pricing arrangement”.
Pricing of goods services or assets within the same organisation
- Identify five advantages of transfer pricing arrangements.
Global tax bill can be reduced
Simplifies internal accoutning
Divisions can be evaluated on spend
- Identify five disadvantages of transfer pricing arrangements.
Careful and strict monitoring to avoid tax evasion
Sourcing locally may be more cost effective.
Some contries economies can be negatively affected.
- Identify the model which can be used to assess the impact a product/purchase has on the organisations profit and level of supply risk it poses to the organisation.
Kraljic Matrix
- Identify four related costs with outsourcing.
- Identify four benefits of outsourcing.
Continuity of supply
Continuity of employment
Protect Rep Damage
Supports local economy
- Identify the matrix to be used to help decide which organisations functions should be outsourced.
Thomas & Kilman
- Identify five functions that are frequently outsourced.
- Explain the terms “insource”, “offshored”, “reshored” and “onshored”
- Identify five risks of outsourcing.
- Identify the legislation that aims to protect employees when outsourced contracts are moved between supplier.
- Describe the work of the ILO and Fairtrade Foundation organisations
- Explain the term “single sourcing”
1.2
- Explain the term “sole-sourcing”
- Identify and explain four advantages of single sourcing
- Identify and explain four disadvantages of single sourcing