SCIM 333 Exam 1 Chapters 1-6

Differentiate between purchasing, procurement, materials management, logistics, supply management and supply chain management.

All used interchangeably Purchasing, supply management and procurement are used interchangeably and refer to the integration of functions that provide effective and efficient materials and services to the organization Supply chain management is focused on minimizing costs and lead times across the supply chain to the benefit of the final customer Logistics is the part of SCM that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the consumer

"Supply is not profit making; instead it is profit taking since it spends organizational resources." Do you agree?

I disagree in that supply management has the ability to cut costs for the company by carrying out the procurement process efficiently and effectively, reducing spend and focusing on quality. By default, the company has to spend money on materials or services, it is just that supply is the department that spends the most

What is the profit-leverage effect of supply? Is it the same in all organizations?

It is measured by the increase in profit obtained by a decrease in purchase spend, for an organization that has paid attention to its supply function it would be difficult to reduce spending by a certain percentage but for an organization that has neglected supply, large savings are possible For many firms, supply is the last untapped "profit producer"

In what ways might e-commerce influence the role of supply managers in their own organizations? In managing supply chains or networks?

Managers would be able to better measure their contribution to the overall success of the company

How can the expectations of supply differ for private versus public organizations? Services versus goods producers?

Private organizations have fewer constraints on need definition, specification and supplier selection, custom specifications are seen as a means of securing competitive advantage Public organizations are subject to strict regulatory requirements regarding acquisition processes and policies, standardization is seen as a means of fairness to suppliers Manufacturer- largest portion of spend with suppliers will be on direct requirements which comprise products sold to customers Service provider- the largest portion of needs is generated by capital, services, and other requirements enabling employees to provide the service, in retailing the largest spend is focused on resale requirements

"In the long term, the success of any organization depends on its ability to create and maintain a customer." Do you agree? What does this have to do with purchasing and supply management?

Purchasing and supply management are largely responsible for the quality of the product based on the inputs they source, customers will remain loyal if the product or service is of good quality at an affordable price

How does supply management affect ROA? In what specific ways could you improve ROA through supply management?

ROA is a measure of corporate performance, if purchase costs are reduced then there is also a reduction in the inventory asset base which is a benefit, supply management is responsible for managing the process with the lowest reasonable levels of inventory attainable A direct contribution to the organization's financial statements

What kinds of decisions does a typical supply manager make?

recognizing need, translating that need into a commercially equivalent description, searching for potential suppliers, selecting suitable sources, agreeing on order or contract details, delivering products or services, and paying suppliers, insourcing or outsourcing, make or buy

Why should a supply manager consider hiring an employee without any supply background?

the need for the organization can be quickly grasped and shows the individual's ability and willingness to make sound decisions and assume responsibility