SCM 371 EXAM 1 VERIFIED ACCURATE STUDY GUIDE
Procurement - Answers - is "the purchase of products or services at the right price,
delivered at the right time, of the right quality, in the right quantity, from the right source"
Procurement: This can be for managing both direct and indirect spend
Procurement Process - Answers - starts with the identification of a need for a product or
service, to the sourcing and appointment of service / product provider and thereafter the
management of those products or services
Direct Spend - Answers - goods & services that can be linked to the production or
service delivery
Indirect Spend - Answers - capital, services and supplies for running the organization.
Purchasing and Supply Management - Answers - are well-accepted terms applied within
a company to describe the function that deals with the company's interface with its first
tier suppliers. The diagram below shows how Purchasing interfaces between the
internal operation, requesting the product or services and the supplier who provides
them.
Why is Procurement important? - Answers - Improvements in procurement also have a
very direct impact on the firm's bottom line. To double the firm's profits, purchasing
would only have to cut the firm's
costs by just over 5%
Key Elements of Procurement and Supply Management - Answers - Planning and
acquiring the current and future needs of the organization
Strategic Orientation
Process-Driven Approach
Cross-Functional Groups
Supply Base Management
Process Driven Approach - Answers - The Procurement Process is a logical sequence
of activities connecting internal customers and external suppliers
Cross Functional Groups - Answers - Procurement
Manufacturing/ Operations
Engineering
Research and Development
Quality
Finance/Accounting
Suppliers
Planning
, Biggest challenges of procurement: - Answers - Managing relationships with the
supplier
New ways of cutting costs—how do you cut costs?
Every time you have a success it makes that more difficult in the future—to cut the next
cost
Choosing the right supplier in right time, supplier selection
Working with the legal department—different priorities, generating tensions
Uncertainty in supply and demand as well as price uncertainty
Location of the supplier—where are you getting the materials from? Where are they
going?
Risks, out of sight out of mind, environmentally
Global Challenges for Procurement - Answers - 1.) Pressure on costs
-Financial crisis
-Commodity prices (fuel, raw materials)
2.) Uncertainty
-Increasing volatility
-Geopolitical instability
3.) Complexity
-Greater economic power of 4.)BRIC countries
-Greater global competition
5.) Sustainability
-Scarce natural resources
-Greenhouse gas emissions
6.) New business models
-Servitization
-Outsourcing/Back sourcing
7.) Technology
-More real-time data
-Cloud computing
Complexity: Global Trade flows - Answers - Bonds will become stronger between Asia
and Mena because Asia needs gas and oil
Complexity: Supply Base, Mini Coopers - Answers - Procurement nightmare, need to be
very responsive, dealing with products you may only buy once or twice
Define: Servitization - Answers - "Servitization is the innovation of an organisations
strategy from products to offering solutions that satisfy a customers value-in-use."
Make the money selling you the supplies.
Improving Quality and Reputation. What else does an organization 'import' from
suppliers? - Answers - Focal
Organisation
Innovation
Risk
Procurement - Answers - is "the purchase of products or services at the right price,
delivered at the right time, of the right quality, in the right quantity, from the right source"
Procurement: This can be for managing both direct and indirect spend
Procurement Process - Answers - starts with the identification of a need for a product or
service, to the sourcing and appointment of service / product provider and thereafter the
management of those products or services
Direct Spend - Answers - goods & services that can be linked to the production or
service delivery
Indirect Spend - Answers - capital, services and supplies for running the organization.
Purchasing and Supply Management - Answers - are well-accepted terms applied within
a company to describe the function that deals with the company's interface with its first
tier suppliers. The diagram below shows how Purchasing interfaces between the
internal operation, requesting the product or services and the supplier who provides
them.
Why is Procurement important? - Answers - Improvements in procurement also have a
very direct impact on the firm's bottom line. To double the firm's profits, purchasing
would only have to cut the firm's
costs by just over 5%
Key Elements of Procurement and Supply Management - Answers - Planning and
acquiring the current and future needs of the organization
Strategic Orientation
Process-Driven Approach
Cross-Functional Groups
Supply Base Management
Process Driven Approach - Answers - The Procurement Process is a logical sequence
of activities connecting internal customers and external suppliers
Cross Functional Groups - Answers - Procurement
Manufacturing/ Operations
Engineering
Research and Development
Quality
Finance/Accounting
Suppliers
Planning
, Biggest challenges of procurement: - Answers - Managing relationships with the
supplier
New ways of cutting costs—how do you cut costs?
Every time you have a success it makes that more difficult in the future—to cut the next
cost
Choosing the right supplier in right time, supplier selection
Working with the legal department—different priorities, generating tensions
Uncertainty in supply and demand as well as price uncertainty
Location of the supplier—where are you getting the materials from? Where are they
going?
Risks, out of sight out of mind, environmentally
Global Challenges for Procurement - Answers - 1.) Pressure on costs
-Financial crisis
-Commodity prices (fuel, raw materials)
2.) Uncertainty
-Increasing volatility
-Geopolitical instability
3.) Complexity
-Greater economic power of 4.)BRIC countries
-Greater global competition
5.) Sustainability
-Scarce natural resources
-Greenhouse gas emissions
6.) New business models
-Servitization
-Outsourcing/Back sourcing
7.) Technology
-More real-time data
-Cloud computing
Complexity: Global Trade flows - Answers - Bonds will become stronger between Asia
and Mena because Asia needs gas and oil
Complexity: Supply Base, Mini Coopers - Answers - Procurement nightmare, need to be
very responsive, dealing with products you may only buy once or twice
Define: Servitization - Answers - "Servitization is the innovation of an organisations
strategy from products to offering solutions that satisfy a customers value-in-use."
Make the money selling you the supplies.
Improving Quality and Reputation. What else does an organization 'import' from
suppliers? - Answers - Focal
Organisation
Innovation
Risk
