Sourcing Flashcards
What is the difference between Tier 1 and Tier 2 Suppliers?
How many layers away from you they are.
What makes a supply chain successful?
Goods and Services going upstream
Money and Information going downstream
What is procurement/purchasing?
The process of obtaining materials, products, and services for a firm/organization
What is the focus of procurement?
ensure an uninterrupted flow of appropriate quality resources in an effective and efficient manner
When procuring things, what do you need to know about the resources you’re buying?
Everything
What are the Procurement Professional Requirements
Resources
Suppliers
Processes
Technologies
What do you need to know about your suppliers?
Who can meet your buying needs
What do you need to know about the procurement processes?
a solid understanding of the process inside and out
What do you need to know about the technologies involved in your procurement process?
how new technologies will influence both processes and products
how does procurement impact the Net Income?
Increased Sales and Decreased Cost
What is the Profit Leverage Effect?
Dollars saved in the procurement process immediately show up in the operating profit
Why is today’s procurement environment challenging?
Competition is increasing
Markets are growing in globality
Change is happening faster with technology
Customers are more knowledgable
Risks are higher
What is the integrative Strategy Development
Corporate Strategy
Business Unit Strategy
Supply Management Strategy
Commodity Strategy
What is corporate strategy?
Definition of the business
How Resources are acquired and allocated
Long term mission of a company
What is a supply management strategy
supporting the business level strategies
how to compliment other functional areas
What Is commodity strategy
how to purchase to support higher level strategies
What is Strategic procurement
finding ways to use supplier capabilities to drive sales
leveraging supply chain to maintain comp. advantage and strategic position
What is a spend analysis
Analyzing what was bought
analyzing what was received
analyzing if the price was accurate per the contract and quality
identify if the budget was correct
find opportunities to optimize
What is purchasing Management?
Non Critical Items
Focus on functional efficiency and abundant supply
what is sourcing management?
Bottleneck Items
focus on cost and reliable short-term sourcing
production based scarcity
what is material management?
Leverage items
Focus on Cost/Price and material flow management
abundant supply
what is supply management?
Strategic Items
Focus on long term availability
natural scarcity
What type or procurement is LOW complexity and LOW importance of purchase?
Purchasing Management
What type or procurement is LOW complexity and HIGH importance of purchase?
material Management
