MNP3701 SUMMARY

Introduction to Purchasing and Supply Chain Management – Chapter 1 Chapter Overview  A new competitive environment  Why purchasing is important  Understanding the language of purchasing and supply chain management  The supply chain umbrella  Four enablers of purchasing and supply chain management  The evolution of purchasing and supply chain management  Looking ahead A New Competitive Environment  Increasing numbers of world-class competitors  Sophisticated customer base  More performance at a lower cost  Widely available information sources  Balance of power between buyers and suppliers  Greater outsourcing Factors Driving SCM  Low cost and wide availability of information more closely links the members of a supply chain  Competition in domestic and international markets requires quickness, agility, and flexibility  Customer expectations and requirements are more demanding  Major disruptions require the ability of a supply chain to react rapidly  Competition between supply chains, not just companies Why Purchasing Is Important  Purchased content is a significant part of the cost of goods sold (≥ 55%)  Move from traditional, adversarial buyer-supplier relations to improve supply chain performance  Purchased content’s impact on product and service quality  Participation in product and process design  Use of cross-functional teams  Early supplier involvement  The supply chain’s impact on competitive advantage