Global Supply Chain Ch. 5
A reason for decentralization is a reduction in duplication of effort.
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Center-led organizations have the same total authority that purely centralized units do.
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Few of the tasks that qualify as operational support are being streamlined or automated, especially with the advent of e-purchasing systems.
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If each division or unit is responsible for developing its own e-purchasing system or data gathering and part-numbering system, the result will be a compatible purchasing system.
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If the CPO at corporate headquarters has the authority for the majority of the organization's purchases, then the organization maintains a decentralized authority structure.
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If the organization's strategy is to be responsive to individual customers in different markets, then a more centralized approach is likely.
false
In general, the lower purchasing is in the corporate structure, the greater the role it plays in supporting organizational objectives.
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In organizations where new product development occurs at the divisional or business unit level, a centralized purchasing structure can support new product development at earlier stages.
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Increasingly, purchasing is becoming more involved with expediting and inventory control.
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Managing day-to-day supply management operations is substantially the same as managing longer-term responsibilities.
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Organizations that rely on part-time teams typically do not maintain their existing functional structure while adding additional team-related duties.
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Perhaps the least important factor contributing to purchasing's position in the organizational hierarchy is history.
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Purchasing is becoming more of a tactical function and less of a strategic function.
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Purchasing never analyzes whether a new or existing purchase requirement should be internally or externally sourced.
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Separation of supply management duties into strategic and tactical job assignments means that strategic responsibilities are more important.
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Separation of supply management duties into strategic and tactical job assignments means that tactical responsibilities are more important.
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Supply management is a progressive approach to managing the supply base that relies primarily on a traditional arm's-length or adversarial approach with sellers.
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The ability to respond quickly to user and customer requirements has always been a major justification for centralized purchasing authority.
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The mission of a decentralized purchasing structure is to facilitate the consolidation of similar buying requirements and standardize buying processes at the various facilities.
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The skills required for a strategic focus are the same as those required for an operational focus
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The supply chain organization of the future will rely much more on hierarchical and functional boundaries.
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The trend today is to move away from a horizontal focus, where work and information are managed across groups and between organizations, toward a vertical focus, where work and information are managed up and down within functional groups.
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Today's version of decentralized purchasing should emphasize support, integration, and coordination of different tasks that are common across a business rather than strict control over all the activities within the purchasing process.
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A consortium is a voluntary group where buyers are in the same industry and conduct business with many of the same suppliers.
true
Decentralized purchasing personnel should gain a greater understanding and appreciation of local operating requirements.
true
Detailed short- and long-term purchasing plans are required for items subject to technological, economic, or political change.
true
If purchases are very different across business units, an argument could be made for decentralization
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Many recognition and reward systems today encourage members not to participate on teams
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Not all observers agree that the use of teams is a guarantee of greater effectiveness.
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Participation on a team may present a personal risk and create conflict once members realize that supporting a team takes time away from activities that are recognized and rewarded.
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Progressive organizations recognize that a need for expeditors indicates that suppliers are performing as required, or that suppliers are receiving realistic or stable material release schedules.
true
Purchasing personnel cannot become experts in all categories of spend, especially as the purchasing function becomes more complex and sophisticated.
true
Regarding the continuum of complete centralization and complete decentralization of purchasing authority, few organizations lie at these polar extremes, and most organizations lie somewhere toward one end or the other.
true
Regional buying groups are most advantageous where geographic concentration exists within a company.
true
Spend analysis involves using systems software to identify items purchased in common among divisions or business units.
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Strategic responsibilities lack the immediacy of tactical duties and, as a result, are often ignored
true
The actual expediting process frequently provides new value within the purchasing process.
true
The advantage of center-led organizations is their ability to garner savings on common purchases yet allow local purchasing decisions on unique items.
true
The challenge today for location of authority is to know which activities, processes, and tasks to control or coordinate centrally and which to assign to operating units.
true
The objective of value analysis is to enhance value by reducing the cost of a good or service without sacrificing quality, enhancing functionality without increasing cost, or providing greater functionality to the user above and beyond any increase in cost.
true
The preparation and transfer of material releases to suppliers is part of the operational support
true
Transportation is a highly specialized activity with its own set of requirements.
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