Term
| Procurement Primary Responsibilities |
|
Definition
Identifying / selecting suppliers, negotiating contracts
Supply opportunity research
Long-range material forecasts
Boundary scanning
Operational support / follow-up
Expediting orders
Releasing orders
4. Functional administration and support |
|
|
Term
|
Definition
is a collection of structured, related
activities that produce a specific service or product or serve a
particular goal for a customer. A process can be visualized with
a flowchart as a sequence of activities. |
|
|
Term
| Objective for Procure-to-Pay (P2P) Process |
|
Definition
| Achieve the “best landed cost” position for a specified product quality, quantity and terms & conditions |
|
|
Term
|
Definition
| select, requisition, process and pay |
|
|
Term
| Business Process Improvement (BPI) |
|
Definition
| attempts to reduce the variation and waste in processes so the desired outcome can be achieved with better utilization of resources. |
|
|
Term
|
Definition
defining the organization's strategic goals and purposes
determining the organization's customers (or stakeholders)
aligning the business processes to realize the organization's goals |
|
|
Term
| Four management roles are required to successfully undertake business process improvement |
|
Definition
| Business leader, Process owner, Operational manager, process operator |
|
|
Term
|
Definition
| person responsible to create business plans |
|
|
Term
|
Definition
| person responsible for process design and its performance results |
|
|
Term
|
Definition
| person responsible to put resources in-place to achieve process plans |
|
|
Term
|
Definition
| person responsible to perform the process work |
|
|
Term
| Process design requirement is to define |
|
Definition
responsibility (may be joint)
accountability (singular)
coordination (two-way)
inform (one-way)
(RACI) |
|
|
Term
|
Definition
| are operating instructions on how to functionally carry out a task |
|
|
Term
| Benefits of a Procedure Manual |
|
Definition
Offers a tool for consistency of action
Provides means of training employees
Allows for documenting “industry-best” practices |
|
|
Term
| Characteristics of Good Policy |
|
Definition
Address the human side systematically
Start at the “TOP”
Involve every organizational layer
Make a formal case for change
Create employee ownership
Communicate the message
Assess the cultural landscape
Address the culture explicitly
Prepare for the unexpected
Speak to the individual |
|
|
Term
|
Definition
Designates overall authority of a purchasing department
Sets forth principles and objectives guiding purchasing processes |
|
|
Term
|
Definition
Defines the corporate purchasing office duties and responsibilities
Delineates authority and responsibilities between corporate and division purchasing departments |
|
|
Term
|
Definition
Giving preferential treatment to suppliers who are also customers
Can take on a coercive nature
Federal Trade Commission rules |
|
|
Term
|
Definition
Purchasing department buys material to satisfy the personal needs of its employees
“Trade diversion laws” in some states
Exceptions: safety shoes, hats, gloves, special tools
“Gray areas” must be defined and communicated |
|
|
Term
| Purchasing policies define management’s approach to |
|
Definition
role of purchasing
conduct of purchasing personnel
social and minority business objectives
buyer-seller relationships
resolving operating issues |
|
|
Term
| Purchasing Organizational Design |
|
Definition
Enables organization to reach its goals (strategic & tactical)
Includes the structure, division of labor, coordination, control, responsibility and accountability
Address formalized elements of organization |
|
|
Term
|
Definition
Company (senior management) must decide who and how supply management will decisions be made
Decision making authority exists on a continuum ranging from total authority at the corporate level to total authority in the hands of operating units |
|
|
Term
| Operational (decentralized design) |
|
Definition
(Action Orientation)
purchase generalists
non-consolidated info
minimal collaboration
targeted efforts
numerous suppliers
opportunistic savings |
|
|
Term
|
Definition
(Process Orientation)
sourcing teams
shared information
voluntary participation
team-based priorities
preferred suppliers
sub-optimized savings |
|
|
Term
Strategic
(centralized design) |
|
Definition
(Directive Orientation)
commodity managers
integrated information
binding decisions
global coordination
strategic alliances
maximized savings |
|
|
Term
|
Definition
| Assume employees dislike and avoid work; the manager must use coercion, threats, and control schemes to motivate the workers |
|
|
Term
|
Definition
| Assume the employee considers work as natural and enjoys the satisfaction of self-actualization needs and esteem |
|
|
Term
|
Definition
| Japanese developed approach to motivate workers through a focus on trust, quality, collective decision-making, and cultural values |
|
|
Term
|
Definition
gain insight into supplier performance
internal requirements in cost, quality, delivery, cycle time
capacity, material, and service needs |
|
|
Term
|
Definition
gain insight into material specifications
evolving product and process technology requirements
new product requirements |
|
|
Term
|
Definition
gain insight into demand planning requirements
new product ideas promotions and planned demand shifts |
|
|
Term
| Functional Integration Objectives |
|
Definition
become more closely aligned
develop organizational capabilities
improve competitive positioning |
|
|
Term
| Functional Integration Benefits |
|
Definition
Work together on a common problem
Represent different points of view
Require diverse languages, cultures, currencies
Develop common business understanding (ownership) |
|
|
