SCM_Ch2_3_4 Purchasing-Suppliers_Sustainable Purchasing (2)

SCM_Ch2_3_4 Purchasing-Suppliers_Sustainable Purchasing (2)...

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Supply Chain Management Chapters 2, 3 and 4 Purchasing, Supplier Relationships, and Ethical and Sustainable Sourcing
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Introduction Purchasing/Sourcing Auctions Total Cost of Ownership Make or Buy Decisions Suppliers Developing Supplier Relationships Supplier Development Public Sourcing
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Purchasers in a Supply Chain
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Replenishment Cycle Order Payment(s) Shipment(s) Customer Inventory Monitoring Ordering Payment
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Purchasing Process Requisitions Material requisition Purchase requisition Travelling requisition Planned Order Releases MRP or BOM
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Purchasing Process Purchase Request Requisitions Material requisition Purchase requisition Catalog Ordering Planned Order Releases-MRP, BOM and System generated orders (generate automatic requisitions)
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Purchasing Process Request for Quotation (RFQ) Request for Proposal (RFP)
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Purchasing Process Placing Orders Purchase Orders Blanket Purchase Orders Stockless Purchase Order Contract Procurement Cards (Credit Cards) System Generated Orders
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Purchasing Process Purchasing Methods Negotiations Competitive Bidding Reverse Auctions
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Purchasing Supply Management - a newer term that encompasses all acquisition activities Institute of Supply management defined supply management as the “ Identification, acquisition, access, positioning, and management of resources an organization needs or potentially needs in the attainment of its strategic objectives .” Strategic sourcing - managing the firm’s external resources to support firm’s long term goals Bench-marking -the process of copying what other businesses do best and a comparison amongst competitors
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Strategic Procurement
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Purchasing Supply Management Attainment of its strategic objectives Quality: Ingredients for pizzas, sushi Convenience: 7 Eleven, Walgreens Prices: Wal-Mart, Dell Computers
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Role of Supply Management The primary goals of purchasing are: Ensure uninterrupted flows of raw materials at the lowest total cost Improve quality of the finished goods produced Optimize customer satisfaction Purchasing contributes to these objectives by: Actively seeking better materials and reliable suppliers Work closely with and exploiting the expertise of strategic suppliers to improve quality and materials Involving suppliers and purchasing personnel in new product design and development efforts
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Financial Measures Profit Leverage Effect Decrease in spending (COGS) is more advantageous than an equivalent percentage increase in revenue (Sales) Simplified  I ncrease  Sales 10% Decrease  Cost 10% Gross Sales 1,000,000        1,100,000        1,000,000         - Cost of Goods Sold  (50%) (500,000)          (550,000)          (450,000)          = Gross Profit 500,000           550,000
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This note was uploaded on 09/02/2011 for the course MAR 3203 taught by Professor Messiah during the Spring '09 term at University of Central Florida.

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SCM_Ch2_3_4 Purchasing-Suppliers_Sustainable Purchasing (2)...

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