Test_2_Essay_questions

Test_2_Essay_questions - 1. Identify and define the steps...

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1. Identify and define the steps in the purchasing strategy development process. Step 1: Define Business Unit Requirements Purchasing must identify set of goals it must achieve Begins at commodity level Step 2:  Define the Strategic Importance of the Purchasing Requirement (Portfolio Analysis Exhibit 6.4) Understand the purchase requirement relative to business unit  objective Use portfolio analysis  Transaction/Price Quadrant (MRO)  Bottleneck/Problem Quadrant  Leverage Quadrant              Strategic Quadrant Step 3:  Determine Business and Purchasing Requirements and Conducting  Supply Management Research Step often overlooked but critical Glove example from chapter 3 Step 4:  Set Goals and Conduct Gap Analysis Establish specific targets Must be specific, measurable and action oriented Step 5:  Develop Sourcing Strategy Objectives Consider relevant criteria included in research Best suppliers, “risk,” and “profit potential” Step 6:  Execute the Strategy Requires ownership and documentation One key element is to develop a contingency plan Step 7: Monitor Results and Review Performance Regular reviews must be held May include feedback to and input from key suppliers
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Identify and briefly discuss the types of purchasing strategies. Supply Base Optimization Process to determine appropriate number and mix of suppliers “Right sizing” Usually reduces amount of suppliers TQM of Suppliers Requires suppliers to initiate Six Sigma Philosophy of zero defects and continuous improvement Global Sourcing Views entire world as potential source for materials This can provide immediate and dramatic improvements in cost and  quality Long-Term Supplier Relationship Relationship over extended period of time (3 years +) Usually seek supplier with unique technological expertise Early Supplier Design Involvement Participate in predesign phase of new product development Cross-functional product development teams Supplier Development Work directly with supplier to facilitate improvement in a specific area Motivation is longer term benefits to buyer and supplier Total Cost of Ownership Identifying cost beyond unit price, transportation, etc. Also includes late delivery, poor quality and other forms of supplier non- performance. E-Reverse Auctions (e-RAs)
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This note was uploaded on 06/24/2008 for the course SCM 355 taught by Professor Pearson during the Spring '08 term at ASU.

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Test_2_Essay_questions - 1. Identify and define the steps...

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