Which type of purchases include the modules and components that are used in
production processes and add value to the product?
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Direct materials
The Buy Process
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-initiates the flow of materials in the supply chain
-can generate a sustainable advantage through lower costs, higher quality,
and better service from our global supply base of trading partners
Important:
1. organizations are not vertically integrated
, 2. the supply base is geographically dispersed
3. the buy process can provide competitive advantage
Kraljic's Portfolio Purchasing Model evaluates goods on two criteria. What are they?
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Supply Risk and Profit Impact/Spending Levels
-low/low: non-critical items/"Generic" goods (readily available, not
production items)
-low/high: bottleneck items/"Distinctive" goods (limited # of suppliers,
unique items)
-high/low: leverage items/"Commodity" goods (multiple suppliers, basic
production items)
-high/high: strategic items/"Critical" goods (strategic suppliers, key
components)
Supplier scorecard
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- monitor performance across multiple metrics over extended time period
- categorize suppliers based on their scores
- offer additional business to best performers
Procurement: What's the goal?
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, -strategically manage sources of supply to reduce Total Cost of Ownership
(TCO)
-materials
-quantity
-condition
-time
-location
-source
-price
*what we need, when we need it
Make or Buy Analysis
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the process of determining the most attractive alternative involves
comparing the costs avoided to costs of outsourcing
A strong procurement process can lead to...
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-cost reduction
-improved order to delivery timelines
-shorter product development cycles
-access to supplier expertise and technology
-improved product quality
production processes and add value to the product?
Give this one a try later!
Direct materials
The Buy Process
Give this one a try later!
-initiates the flow of materials in the supply chain
-can generate a sustainable advantage through lower costs, higher quality,
and better service from our global supply base of trading partners
Important:
1. organizations are not vertically integrated
, 2. the supply base is geographically dispersed
3. the buy process can provide competitive advantage
Kraljic's Portfolio Purchasing Model evaluates goods on two criteria. What are they?
Give this one a try later!
Supply Risk and Profit Impact/Spending Levels
-low/low: non-critical items/"Generic" goods (readily available, not
production items)
-low/high: bottleneck items/"Distinctive" goods (limited # of suppliers,
unique items)
-high/low: leverage items/"Commodity" goods (multiple suppliers, basic
production items)
-high/high: strategic items/"Critical" goods (strategic suppliers, key
components)
Supplier scorecard
Give this one a try later!
- monitor performance across multiple metrics over extended time period
- categorize suppliers based on their scores
- offer additional business to best performers
Procurement: What's the goal?
Give this one a try later!
, -strategically manage sources of supply to reduce Total Cost of Ownership
(TCO)
-materials
-quantity
-condition
-time
-location
-source
-price
*what we need, when we need it
Make or Buy Analysis
Give this one a try later!
the process of determining the most attractive alternative involves
comparing the costs avoided to costs of outsourcing
A strong procurement process can lead to...
Give this one a try later!
-cost reduction
-improved order to delivery timelines
-shorter product development cycles
-access to supplier expertise and technology
-improved product quality
