Global Supply Chain Ch. 5

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A reason for decentralization is a reduction in duplication of effort.

false

Center-led organizations have the same total authority that purely centralized units do.

false

Few of the tasks that qualify as operational support are being streamlined or automated, especially with the advent of e-purchasing systems.

false

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.

false

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.

false

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.

false

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.

false

Increasingly, purchasing is becoming more involved with expediting and inventory control.

false

Managing day-to-day supply management operations is substantially the same as managing longer-term responsibilities.

false

Organizations that rely on part-time teams typically do not maintain their existing functional structure while adding additional team-related duties.

false

Perhaps the least important factor contributing to purchasing's position in the organizational hierarchy is history.

false

Purchasing is becoming more of a tactical function and less of a strategic function.

false

Purchasing never analyzes whether a new or existing purchase requirement should be internally or externally sourced.

false

Separation of supply management duties into strategic and tactical job assignments means that strategic responsibilities are more important.

false

Separation of supply management duties into strategic and tactical job assignments means that tactical responsibilities are more important.

false

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.

false

The ability to respond quickly to user and customer requirements has always been a major justification for centralized purchasing authority.

false

The mission of a decentralized purchasing structure is to facilitate the consolidation of similar buying requirements and standardize buying processes at the various facilities.

false

The skills required for a strategic focus are the same as those required for an operational focus

false

The supply chain organization of the future will rely much more on hierarchical and functional boundaries.

false

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.

false

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.

false

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

true

Many recognition and reward systems today encourage members not to participate on teams

true

Not all observers agree that the use of teams is a guarantee of greater effectiveness.

true

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.

true

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.

true

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.

true


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