Procurement Test 1

A ___-way match is often required to pay invoices and generally includes: 1. P.O. 2. Invoice 3. Receiving Report

3

Successful teams are: Supportive, have a ______________ purpose, organized for customer satisfaction, up-front planning, and shared leadership roles

Common

Due to the higher levels of _____________ in domestic and international markets, greater quickness, agility, and flexibility is required to remain competitive

Competition

Use ______________ bidding when there is adequate time available for suppliers to evaluate RFQ and the Buyer does not have a preferred supplier for a particular item

Competitive

Although there is a trend toward less reliance on ____________ ___________ and more negotiated long-term contracts, many contracts are still awarded through this process

Competitive Bids

An abundance of ______________ and choices have conditioned customers to want higher quality, faster delivery, and products and services tailored to their individual needs at a lower cost

Competitors

______________ of purchasing personnel entails 1. ethics policy, 2. reciprocity policy 3. contacts and visits to suppliers 4. former employees representing suppliers 5. reporting of irregular business dealings with suppliers

Conduct

Regarding the ______________ of complete centralization and complete decentralization of purchasing authority, few organizations lie at the polar extremes

Continuum

_____________ management is a process associated with defining the contract, defining roles and responsibilities of both parties, and advising when to modify and ensure appropriate escalation

Contract

_______________ management is a process associated with defining the contract, defining roles and responsibilities of both parties, and advising when to modify and ensure appropriate escalation

Contract

_______________ social responsibility= activities such as use of recycled materials, compliance with regulations, proper disposal of waste (environmental)

Corporate

Low ____________ and wide availability of information, resulting in more closely linked members of a supply chain is factor driving SCM

Cost

A _______________-functional approach to supply management consists of information sharing and suppliers act as an extension of the buying company

Cross

Form a ___________-functional team when: Facing a complex or large-scale business decision, CFT is likely to make better quality decision, assignment directly affects firm's competitive position, No single function has sufficient resources to solve the problem.

Cross

Purchasing ________________ consists of the authority to conduct business and represent organizational interests. It is created by the EXECUTIVE COMMITTEE

Authority

The type of organizational structure, which combines a centralized approach for purchased items common to several business units and a decentralized approach to unique requirements, is termed ___________-led.

Center

Using the __________-led structure takes part in strategic sourcing groups- often located by sourcing region, use of a common ERP system for spend management

Center

Efficiency= _________________________

Centralized

Highly controlled management=_____________________

Centralized

If the Chief Purchasing Officer at a corporate headquarters has the authority for the majority of the organization's purchase expenditures, the firm maintains a ________________ structure

Centralized

Large purchase dollar expenditures=_________________

Centralized

Similar purchases= ________________

Centralized

What is step five of the order cycle?

Placement of purchase order

Effective _______________ are action-oriented guidelines that provide guidance. They provide enough detail to direct behavior toward a specific goal or objective but are not so detailed that they discourage personnel from following the policy

Policies

_____________ define and clarify top management objectives. They are a means for executives to communicate their leadership and views

Policies

______________, though, are often difficult to communicate throughout large organizations and might be viewed as a substitute for effective management.

Policies

________________ provide framework for consistent decision-making and action. they define rules and procedures for all employees

Policies

"______________" refers to a set of purposes, principles, and rules of action that guide an organization

Policy

A ________________ manual clearly lays out purchasing authority, which details how purchasing is to conduct business and represent organizational interest

Policy

An Effective ____________ is: action-oriented, relevant, concise, unambiguous and well-understood, timely and current, helpful in problem solving

Policy

The term ______________ refers to set of purposes, principles, and rules of action that guide an organizaiton

Policy

1. Getting the right ___________

Quality

2. In the right ______________

Quantity

Elements of the purchase _______________: description of required material or service, quantity required, estimated unit cost, operating account to be charged, date of requisition, date required, authorized signature

Requisition

Purchasing is currently looked at as an area within a company that is _________________ generating, a corporate strategic advantage, and ushering in new technologies

Revenue

Supply Management directly affects what two forces that impact the bottom line?

Sales and Costs

Disadvantage of ______________ purchasing: Increased duplication of purchasing effort

Decentralized

Dissimilar purchases= ____________________

Decentralized

Less control in management=__________________

Decentralized

Responsiveness= ___________________

Decentralized

Signs of a _____________ structure= purchasing authority for the majority of purchase expenditures is a the divisional, business unit, or site level.

Decentralized

Small purchase dollar expenditures=___________________

Decentralized

What is step 2 of the order cycle?

Description of need

Organizational ________________ refers to the process of assessing and selecting the structure and formal system of communication, division of labor, coordination, control, authority, and responsibility to achieve organizational goals and objectives, including supply chain objectives

Design

Some organizational __________ best practices: 1. centrally led supply teams 2. executive responsibility for coordinating, purchasing, and supply chain activities 3. collocation of supply personnel with internal customers 4. cross-functional teams to manage supply chain processes 5. supply strategy coordination and review sessions between business unites 6. executive buyer-supplier council to coordinate with supliers

Design

Increased ____________ of purchasing effort can be a disadvantage of decentralized purchasing

Duplication

Four ____________ of purchasing and SCM: HR, Organizational design, Information Technology, Measurement

Enablers

Purchasing Authority is created by ________________ committee

Executive

Purchasing Authority is the authority to delegate certain tasks and assignments to other ______________ areas. It also describes the scope of and limits to authority

Functional

A Functional ________________ refers to a formal entity on the organizational chart while a functional activity is the actual process such as buying goods and services

Group

Purchasing refers to a functional ______________ as well as a functional activity

Group

1. CAPABALE ______________ RESOURCES

HUMAN

The trend today, in regards to organizational design is to move away from a vertical focus, where work and information are managed up and down within functional groups, toward a ______________ focus, where work and information are managed across groups and between organizations

Horizontal

What is step 3 of the order cycle?

Identification of sources

The newer approach to purchasing involves ______________ cost reduction with suppliers

Joint

_____________________ ______________- Results from a failure to respond to the needs of internal customers. Failure will diminish the confidence these users have in purchasing, and they may try to negotiate contracts themselves.

Maverick Buying

________________ ________________: user selects different supplier than supply management has approved, may be acceptable when there is a small chance of risk, loss of opportunity to control cost and/or leverage purchase volume, Exposes firm to greater risk

Maverick Spending

Social and ____________ Business Objectives= Support and development of minority business suppliers that suffer from lack of access to capital, inability to attract qualified managerial and technical professionals, and are relatively small in size

Minority

Cross-functional sourcing teams IDENTIFY POTENTIAL SUPPLIERS BEFORE A _______________ OCCURS RESULTING IN FASTER ORDER CYCLE TIMES AND BETTER SUPPLIER EVALUATION AND SELECTION

NEED

Use _______________ when any of the criteria for competitive bidding are missing

Negotiation

Use ________________ when a purchase requires agreement on a WIDE RANGE of performance factors other than price

Negotiation

2. PROPER ________________ DESIGN

ORGANIZATIONAL

The _____________ _____________ is a process used to identify user requirements, evaluate user needs effectively, identify suppliers, develop agreements, develop order mechanisms, ensure prompt payment, ascertain that the need was effectively met and drive continuous improvement

Order Cycle

What is step 6 of the order cycle?

Order Follow-up

_______________ ________________- the process of assessing and selecting the structure and formal system of communication, division of labor, coordinate, control, authority, and responsibility required to achieve organizational goals and objectives, including supply management objectives

Organizational Design

Purchasing was traditionally Clerical, ______________ pushing or even an after-thought

Paper

5. From the right ______________

Source

Cross-Functional _______________ teams are used to proactively determine sourcing needs

Sourcing

_________________ analysis is the process of collecting historical data by commodity. Drive all spend to a unit or rate of consumption

Spend

__________________ ______________- the process of collecting historical data by commodity, relative to demand from the lines of business, with the exception of personnel expenses, occupancy, and corporate spend

Spend Analysis

Organizational _______________ details assignment of work along with authority that accomplishes those responsibilities. Helps define how firm communicates and integrates decision making across groups comprising organization

Structures

Purchase Orders are drafted after _______________ selection and evaluation

Supplier

Use competitive bidding when there is adequate time available for suppliers to evaluate RFQ and Buyer does not have a preferred ______________ for particular item

Supplier

Step 4 in the order cycle is what?

Supplier Selection

Purchasing's right to evaluate and select _______________ does NOT necessarily mean that sales representatives are not allowed to talk with non-purchasing personnel

Suppliers

Labor and human rights policies should be implemented back through the _______________ chain

Supply

__________________ risk is defined as the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety

Supply

A ______________ _____________ is a set of three or more organizations linked directly by one or more of the upstream or downstream flows of products, services, finances and information from a source to a customer

Supply Chain

Factors driving the emphasis on _____________ ______________: 1. low cost and increase availability of information resources 2. levels of competition 3. Customer expectations and requirements

Supply Chain

The ____________ __________ umbrella= purchasing, inbound transportation, quality control, demand and supply planning, receiving, materials handling and storage, material or inventory control, Order processing, production planning, shipping/warehousing/distribution, outbound transportation, customer service

Supply Chain

Another definition of _____________ __________ ____________= the identification, acquisition, access, positioning and management of resource capabilities an organization needs or potentially needs in the attainment of its strategic objectives.

Supply Chain Management

Competition today is no longer between firms, it is between the ___________ ____________ of those firms

Supply Chains

Because the source process involves multiple communications among internal customers, purchasing, sales and the suppliers' internal functions, the right to be the primary contract with suppliers during the contracting process is retained by _______________ __________________

Supply Management

___________ ___________ is a strategic approach to planning for and acquiring the organization's current and future needs through effectively managing the supply base, utilizing a process orientation in conjunction with Cross-functional teams to achieve the organizational mission

Supply Management

The supply chain organization of the future will rely much more on ______________ capability to enable enhanced collaboration and further improve the efficient and effective management of the flow of goods information and processes from suppliers to final customers

Systems

3. REAL- TIME COLLABORATIVE _______________ CAPABILITIES

TECHNOLOGY

A supply chain is a set of ____________ or more organizations linked directly by one or more of the upstream or downstream flows of products, services, finances and information from a source to a consumer

Three

3. At the right ______________

Time

If purchasing ______________ for the majority of purchase expenditures is at the divisional, business unit, or site level, then a firm has a more decentralized structure

authority

If purchasing authority for the majority of purchase expenditures is at the divisional, business unit, or site level, then a firm as a more ________________ strucutre

decentralized

Buyers may need to consider a supplier's ability to comply with _____________ regulations as a condition for selection

environmental

Policies act as a ______________ while procedures act as a "how-to"

framework

________________ design refers to the process of assessing and selecting the structure and formal system of communication, division of labor, coordination, control , authority and responsibility required to achieve organizational goals and objectives, including supply chain objectives

organizational

__________________ purchases= Centralized

similar

A _____________ purchase order is an open order, usually effective for one year, covering repeated purchases of an item or family of items. Items are released as needed instead of on a new PO.

Blanket

Open _____________ channels via the internet, intranets, and information technology systems make information widely available across the supply chain. This availability of information will help coordinate activities across the organizational chart.

Information

Failing to respond to the needs of _____________ customers will diminish the confidence these users have in purchasing, and they may try to negotiate contracts themselves, a practice known as MAVERICK BUYING

Internal

What is step 8 of the order cycle?

Invoice clearing and payment

A 3-way match is often requires to pay _____________ and generally includes: 1. P.O. 2. Invoice 3. Receiving Report

Invoices

Use Negotiation when buyer requires early supplier ___________________

Involvement

Another facet of CSR is ____________ and Human Rights Policies- They are also now required by governments, investors, and major customers and include the ethical treatment of suppliers' employees (living wages, safety and security, and overtime)

Labor

4. RIGHT _____________ AND ______________ SYSTEMS

MEASURES, MEASUREMENT

Step 3 of the order cycle, "Identification of sources", is where the problem of ______________ spending arises in regards to the use of a new supplier.

Maverick

4. For the right _______________

Price

The traditional approach to purchasing involved bargaining hard for _________________ reductions

Price

Some _____________ areas: Purchasing Cycle, Proper use of purchasing forms, development of legal contracts, operational procedures

Procedural

A _____________ is an operating instruction detailing functional duties or tasks

Procedure

A ______________ manual acts as a reference guide that is especially valuable to new employees.

Procedure

A ________________ manual may specify industry BEST PRACTICES

Procedure

A ________________ manual provides consistence and order by documenting required steps and activities

Procedure

A ________________ manual should be simplified and streamlined whenever possible by minimizing the number of steps and limiting the level of detail

Procedure

Purchasing _____________: operating instructions detailing functional duties or tasks. It serves as a "how-to" manual. There is no uniform set of procedures that applies to every situations

Procedures

_______________ are the operating instructions detailing functional duties and tasks, and a procedure manual is really a how-to manual

Procedures

Good Supplier quality results in good ______________ quality. Basically, lapses in managing supplier quality can potentially tarnish a buyer's reputation

Product

A ______________ _______________ is a legally-binding document (contract) and include details on on the quantity of material, material specification, quality requirements, price, delivery date, method of delivery, ship-to address, purchase order number, and order due date.

Purchase

A _______________ ___________________ is visible to: Accounting, Requisitioner or requesting department, receiving, traffic management, supply management, and quality control

Purchase Order

A three-way match required to pay invoice includes what three things?

Purchase Order, Invoice, receiving report

________________ _______________ are legally binding documents drafter after supplier selection and evaluation are completed

Purchase Orders

_______________ refers to a functional group as well as a functional activity

Purchasing

_________________ authority- how purchasing is to conduct business and represent organizational interest

Purchasing

By 1866, the Pennsylvania _________________ had given the purchasing function departmental status, under the title SUPPLYING DEPARTMENT

Railroad

The development and expansion of the intercontinental _____________ system in the 1800s, signaled an interest in and promotion of the field of purchasing

Railroad

What is step 7 of the order cycle?

Receipt and inspection

It is important to avoid the appearance of _______________: giving preference to suppliers that buy from you. Expecting suppliers to purchase your products as condition for securing a purchase contract

Reciprocity

What is step one of the order cycle?

Recognition of need

A Purchase ________________ is used to communicate the needs internally between users and supply management. It is used as a gatekeeping tool to manage the flow of information.

Requesition

Disadvantage of using _______________= enforcing lower performance norms

Teams

Key SCM _____________ are those that capture and share real-time or near real-time data across the Supply Chain. Some Examples: GPS, Internet-based systems, Bar codes, RFID

Technologies