W1

Question 1

What is the PSM traditional view?

Answer 1

The traditional view of purchase and supply takes a linear approach and focuses on moving large quantities of goods with little concern for the environment (disposal and pollution)

Question 2

Purpose of SCM

Answer 2

Getting the right product to the right place at the right time

Benefits = satisfied customers

Minimum requirements
- contractual agreement with supplier
- forecast
- good comms

Question 3

What does a basic supply chain look like?

Answer 3

Upstream - suppliers
Manfucaturing
Downstream - customers

Question 4

Key skills of the PSM professional

Answer 4

• communication and interpersonal skills
• think strategically (making decisions over core and non core activities)
• awareness of overseas culture and customs
• go beyond price - consider total costs
• keep up with new ideas and business models

Question 5

What do organisations need and how can it be managed strategically?

Answer 5

• raw materials
• components (machines)
• maintenance and repair etc.

Question 6

Purchasing process

Answer 6

specification - specify what product you are looking for

selection - look at the suppliers in the market and select the most suitable

contracting - draft a contract and share with the chosen supplier

ordering - order the product

payment

evaluation - continuous improvement - what could’ve gone better

Question 7

purchasing function

Answer 7

serves as a middle man between the operation and the suppliers

(look at diagram)

Question 8

Importance of purchasing

Answer 8

It is important to consider not just the price but the whole cost of the product.

The cheapest products may not have the lowest costs

Orgs need to focus on the whole cost of buying things not just focus on lowest purchasing price

Question 9

2 key developments in purchasing

Answer 9

1. purchasing becomes ‘supply chain management’
2. the rise of sustainable sourcing issues
   - don’t just focus on the profits but the people in the org too

Question 10

Purchasing becomes SCM

Answer 10

(look at diagram)

Question 11

Factors that effect PSM

Answer 11

1. technological pressures - innovation & social media
2. social pressures - CSR & Covid-19
3. political pressures - Brexit & privatisation
4. economic pressures - outsourcing & new markets

Question 12

Supply Chain and Network structure

Answer 12

Dyadic - direct buyer to supplier relationship

Supply chain - can be linear or circular

Network - not linear can bounce from one to another doesn’t just move forward can move backwards as well

Horizontal integration - within the same stage 2 or more companies collaborate in the same activities

Vertical integration - business controls the supply chain and stages of production - no need for third party supplier

(look at diagram)

Question 13

sustainable comp adv in PSM

Answer 13

• company should have a variety of suppliers to gain comp adv
• having good relations with suppliers = long lasting adv. based on how successfully a comp can capture its customers
• strategic = long term relationship
• tactical = short term relationship

Question 14

Kraljics portfolio model

Answer 14

Kraljic discusses the complexity of the market. How easy as a company it is to get the product from the market

(look at diagram)

having low complexity in the market (lots of suppliers) = low
having high complexity in the market (less suppliers) = high

Question 15

strategic sourcing

Answer 15

• deciding which supplier to chose that fits best with the requirements of the company
• it is important to build a base/ network of suppliers over time rather than choosing a random supplier each time
• this way when you choose a supplier you already have a relationship formed with them (strategic - long term approach)
• uses the same procedure as purchasing only with suppliers instead of products

(look at diagram)