OMGT 3123 TEST 2 ECU STUDY GUIDE
Supply Management Defined - Answers -Sourcing decisions and purchasing activities
(collectively Supply Management) serve to link a company with its upstream supply
chain partners
Supply Management is..... - Answers -...the broad set of activities carried out by
organizations to:
- analyze sourcing opportunities
- develop sourcing strategies
- select suppliers
- analyze and negotiate price and cost
- carry out all the activities required to procure goods and services
Why is Supply management is critical for global - Answers -to compete globally for
advances in information systems and changes in environment. "______-______"-ask
Kirchoff
Why is Supply management is critical financial impact for the average manufacturer
because - Answers -nearly 60% of the product value comes from material, on average
Over 60% of firms total COGS is controlled by - Answers -Purchasing
Supply management represents a major opportunity - Answers -to increase profitability
Pretax earnings increased - Answers -% increase = (COGS X %) / pretax earnings
Pretax profit old - Answers -= Pretax earnings / Sales (how much you make on every
$1 of sales)
To increase profit through sales requires: - Answers -(COGS X %) / Pretax profit old =
## increases ( from old Sales to (sales + ##)
Why Supply Management is critical for performance impact - Answers -Quality
Delivery
Technology
Responsiveness
Similar management goals
Problem solving
Study Performance impact chart chapter 7 slide 12 - Answers -
The Supply Management (SM) process - Answers -1. Assess Opportunities
, 2. Profile internally/ externally
3. Develop the Sourcing Strategy
4. Screen Suppliers and create selection criteria
5. Conduct Supplier Selection
-Negotiate
-Ordering *procure to pay cycle*
-Follow up and expediting *pay cycle*
-Receipt and inspection *pay cycle*
-settlement & payments *pay cycle*
-Records maintenance *pay cycle*
THE SM PROCESS :
Assess Opportunities, Profile internally / Externally, Develop the sourcing Strategy and
Screen Suppliers and create Selection Criteria - Answers -Typically, more strategic and
difficult to accomplish
THE SM PROCESS:
Ordering, Follow up and expediting, receipt and inspection, Settlement & Payments,
and Records maintenance - Answers -Typically, more tactical and easier to accomplish
1. Assess Opportunities - Answers -Spending analysis on the company bulk spending
and suppliers highest spending
1. Assess Opportunities firms purchasing needs - Answers -New Projects and Existing
Projects
2. Profile Internally / Externally - Sourcing decisions are high-level, often strategic
decisions: - Answers -Which product will use resources within the firm and products will
be provided by external supply chain?
2. Profile Internally / Externally have - Answers -Insourcing and Outsourcing
Insourcing - Answers -The use of resources within the firm
to provide products or services
Outsourcing - Answers -The use of supply chain partners
to provide products or services
The SM Process: Profile and Strategy Pros of Insourcing - Answers -High degree of
control, Ability to oversee the entire program, and economies of scale and / or scope
Supply Management Defined - Answers -Sourcing decisions and purchasing activities
(collectively Supply Management) serve to link a company with its upstream supply
chain partners
Supply Management is..... - Answers -...the broad set of activities carried out by
organizations to:
- analyze sourcing opportunities
- develop sourcing strategies
- select suppliers
- analyze and negotiate price and cost
- carry out all the activities required to procure goods and services
Why is Supply management is critical for global - Answers -to compete globally for
advances in information systems and changes in environment. "______-______"-ask
Kirchoff
Why is Supply management is critical financial impact for the average manufacturer
because - Answers -nearly 60% of the product value comes from material, on average
Over 60% of firms total COGS is controlled by - Answers -Purchasing
Supply management represents a major opportunity - Answers -to increase profitability
Pretax earnings increased - Answers -% increase = (COGS X %) / pretax earnings
Pretax profit old - Answers -= Pretax earnings / Sales (how much you make on every
$1 of sales)
To increase profit through sales requires: - Answers -(COGS X %) / Pretax profit old =
## increases ( from old Sales to (sales + ##)
Why Supply Management is critical for performance impact - Answers -Quality
Delivery
Technology
Responsiveness
Similar management goals
Problem solving
Study Performance impact chart chapter 7 slide 12 - Answers -
The Supply Management (SM) process - Answers -1. Assess Opportunities
, 2. Profile internally/ externally
3. Develop the Sourcing Strategy
4. Screen Suppliers and create selection criteria
5. Conduct Supplier Selection
-Negotiate
-Ordering *procure to pay cycle*
-Follow up and expediting *pay cycle*
-Receipt and inspection *pay cycle*
-settlement & payments *pay cycle*
-Records maintenance *pay cycle*
THE SM PROCESS :
Assess Opportunities, Profile internally / Externally, Develop the sourcing Strategy and
Screen Suppliers and create Selection Criteria - Answers -Typically, more strategic and
difficult to accomplish
THE SM PROCESS:
Ordering, Follow up and expediting, receipt and inspection, Settlement & Payments,
and Records maintenance - Answers -Typically, more tactical and easier to accomplish
1. Assess Opportunities - Answers -Spending analysis on the company bulk spending
and suppliers highest spending
1. Assess Opportunities firms purchasing needs - Answers -New Projects and Existing
Projects
2. Profile Internally / Externally - Sourcing decisions are high-level, often strategic
decisions: - Answers -Which product will use resources within the firm and products will
be provided by external supply chain?
2. Profile Internally / Externally have - Answers -Insourcing and Outsourcing
Insourcing - Answers -The use of resources within the firm
to provide products or services
Outsourcing - Answers -The use of supply chain partners
to provide products or services
The SM Process: Profile and Strategy Pros of Insourcing - Answers -High degree of
control, Ability to oversee the entire program, and economies of scale and / or scope
