Evangelina Gonzalez Egonza59/0922644 ***Answered the questions while I read the boo! All "# answers are $rett# "u%h verbati" &ro" te't***
Chapter 6 Questions 1-20 1. What is procurement? What is its its relevance to logistics? logistics? •
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(ro%ure"ent) (ro%ure"ent) re&ers to the raw "aterials %o"$onent $arts and su$$lies brought &ro" outside organizations to su$$ort a %o"$an#+s o$erations It is an i"$ortant a%tivit# and %losel# related to logisti%s be%ause a%quired goods and servi%es "ust be entered into the su$$l# %hain in the e'a%t quantities and at the $re%ise ti"e the# are needed
2. Contrast procurement’s historical focus to its more more strategic orientation today. •
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,istori%al &o%us in "an# organizations was to a%hieve the lowest $ossible %ost &ro" $otential su$$liers- o&ten ti"es these su$$liers were $itted against ea%h other in .%utthroat %o"$etitive involving three or si'"onth ar"+slength %ontra%ts awarded to the lowest bidder! bidder! 1n%e this lowest bidder was %hosen the bidding %#%le would al"ost i""ediatel# start again and another low bidder would get the %ontra%t &or the ne't several "onths! oda# oda# b# %ontrast $ro%ure"ent $ro%ure"ent has a "u%h "ore "ore strategi% orientation in "an# organizations and a %onte"$orar# $ro%ure"ent $ro%ure"ent "anger "ight have res$onsibilit# &or redu%ing %#%le ti"es $la# a integral role in $rodu%t develo$"ent or generating additional revenues b# %ollaborating with the "areting "areting de$art"ent!
. !iscuss the the "ene#ts and potential potential challenges challenges of using electronic procurement cards. 3enets) edu%tion edu%tion in the nu"ber o& invoi%es Allow e"$lo#ees to "ae $ur%hases $ur%hases in a "atter o& "inutes as o$$osed to da#s and $ro%ure"ent %ards generall# allow su$$liers to be $aid in a "ore ti"el# &ashion • •
Evangelina Gonzalez Egonza59/0922644 hallenges 1verseas $ur%hases be%o"e $roble"ati% when %onsidering %urren%# di7eren%es availabilit# o& te%hnolog# di7eren%es in %ard a%%e$tan%e and %ultural issues with the $rogra" •
$. !iscuss three potential procurement o"%ectives. (otential (ro%ure"ent 1b8e%tives u$$orting organizational goals and ob8e%tives :or e'a"$le "ini"al inventor# is an organizations o ob8e%tive then $ro%ure"ent $robabl# should not be atte"$ting to "ini"ize total $ro%ure"ent %osts ;anaging the $ur%hasing $ro%ess e7e%tivel# and e<%ientl# o E7e%tivel# is %on%erted with how well $ro%ure"ent ee$s its $ro"ises whereas e<%ientl# re&ers to how well =or $oorl#> $ro%ure"ent uses %o"$an# resour%es in ee$ing its $ro"ises ;anaging the su$$l# base o he sele%tion develo$"ent and "aintenan%e o& su$$l# resour%es ?evelo$ing strong relationshi$s with other &un%tional grou$s o e%ognizes that the inter&un%tional %onsequen%es o& $ro%ure"ent de%isions require "ore %oo$eration and %oordination than has traditionall# e'isted between $ro%ure"ent and the areas su%h as logisti%s "anu&a%turing and "areting! o he la% o& %oo$eration between $ro%ure"ent and other &un%tions %an result in su$$l# shortages e'%ess inventor# &requent writedowns and in%reased lead ti"es u$$orting o$erational require"ents (ro%ur"ent+s &o%us is on satis&#ing internal o %usto"ers and van be su""arized b# bu#ing the right $rodu%ts at the right $ri%es &ro" the right sour%e at the right s$e%i%ations in the right quantit# &or deliver# at the right ti"e to the right internal %usto"er •
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&. 'ame and descri"e the steps in the supplier selection and evaluation process. @> Identi&# need &or su$$l#
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a! Arise &ro" a nu"ber o& %onsiderations su%h as the end o& an e'isting su$$l# agree"ent or the develo$"ent o& a new $rodu%t ituation anal#sis a! oos at both the internal and e'ternal environ"ents within whi%h the su$$l# de%ision is to be "ade! i! Internal %onsiderations in%lude identi%ation o& the relevant staeholders where the su$$l# is needed and the a$$ro$riate quantit# and qualit# the su$$l# as well as a$$li%ation su$$l# $oli%ies ii! E'ternal environ"ent in%lude e%ono"i% %onsiderations the legal and regulator# &ra"ewors %ontrolling the $ur%hase and the "aret$la%e within whi%h $otential su$$liers o$erate Identi&# and evaluate $ossible su$$liers a! A "#riad o& sour%es %an be used to identi&# $ossible su$$liers su%h as sales $eo$le trade shows trade $ubli%ations and the Internet! Its i"$ortant to re%ognize and understand the $otential advantages and disadvantages o& ea%h sour%e Evaluating su$$liers a! an be &a%ilitated i& an organization delineates relevant sele%tion %riteria and assigns weights to these %riteria ele%t su$$liers a! Chere an organization %hooses or "ore %o"$anies to su$$l# the relevant $rodu%t
6. !istinguish "et(een a single sourcing approach and a multiple sourcing approach. •
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ingle our%ing) %onsolidates $ur%hase volu"e with a single su$$lier with the ho$es o& en8o#ing lower %osts $er unit and in%reased %oo$eration and %o""uni%ation in the su$$l# relationshi$ ;ulti$le our%ing) having "ore than one su$$lier to in%rease a"ounts o& %o"$etition greater ris "itigation and i"$roved "aret intelligen%e %an arise
). What are the t(o primary approaches for evaluating suppliers? *o( do they di+er? •
here are two $ri"ar# a$$roa%hes &or evaluating su$$liers) $ro%ess based and $er&or"an%e based
Evangelina Gonzalez Egonza59/0922644 o
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(ro%essbased evaluation is an assess"ent o& the su$$lier+s servi%e and/or $rodu%tion $ro%ess (er&or"an%ebased evaluation is &o%used on the su$$lier+s a%tual $er&or"an%e on a variet# o& %riteria su%h as %ost and qualit#
,. !iscuss the factors that mae supplier selection and evaluation dicult. Generall# involves "ulti$le %riteria and these %riteria %an var# both in nu"ber and i"$ortan%e de$ending on a $arti%ular situation o"e vendor sele%tion %riteria "a# be %ontradi%tor# it is i"$ortant to understand $otential tradeo7s between the" he evolution o& business $ra%ti%es and $hiloso$hes su%h as 8ust98t9el green $ur%hasing and su$$l# %hain "anage"ent "a#be require new sele%tion %riteria or the re$rioritization o& e'isting %riteria /. !istinguish "et(een supplier audits and supplier scorecards. When should each "e used? •
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u$$lier Audit) involves an on site visit to a su$$lier+s &a%ilit# o (ro%essbased u$$lier %ore%ards) re$ort $er&or"an%e in&or"ation to their su$$liers (er&or"an%ebased o
10. !escri"e ral%ic’s ortfolio atri3. What are the four categories of this segmentation approach? •
Dral8i%+s (ort&olio ;atri' is used b# "an# "anagers to %lassi&# %or$orate $ur%hases in ter"s o& their i"$ortan%e and su$$l# %o"$le'it# with a goal o& "ini"izing su$$l# vulnerabilit# and getting the "ost out o& the r"+s $ur%hasing $ower on%riti%al o o everage o trategi% 3ottlene% o
11. !e#ne supplier development4 and e3plain (hy it is "ecoming more prominent in some organi5ations. •
u$$lier ?evelo$"ent) re&ers to aggressive $ro%ure"ent involve"ent not t#$i%all# $art o& su$$lier sele%tion and %an
Evangelina Gonzalez Egonza59/0922644 in%lude a $ur%haser initiating %onta%t with a su$$lier or a $ur%haser establishing $ri%es ter"s and %onditions a"ong other behaviors o he "#riad o& ine<%ien%ies asso%iate with su$$liers initiating "areting e7orts toward $ur%hases su%h as su$$liers $ossessing inadequate insu<%ient or unti"el# in&or"ation o ;ore $roa%tive and aggressive $ro%ure"ent is that the $ur%haser "a# be aware o& i"$ortant benets su%h as redu%ed inventor# and i"$roved &ore%asting a%%ura%# whi%h are unnown to the su$$lier A%hieving %o"$etitive advantage in the su$$l# %hain is o $redi%ated on $ur%hasers ado$ting a "ore aggressive a$$roa%h so as to %o"$el su$$liers to "eet the ne%essar# require"ents
12. What are the components of the glo"al sourcing development model presented in this chapter? •
Global $ro%ure"ent =sour%ing> whi%h re&ers to bu#ing %o"$onents and in$uts an#where in the world is driven b# two $ri"ar# reasons na"el# the &a%torin$ut strateg# and the "areta%%ess strateg# (lanning o $e%i%ation o Evaluation o o elationshi$ "anage"ent o rans$ortation and holding %osts I"$le"entation o ;onitoring and i"$roving o
1. What are some of the challenges of implementing a glo"al sourcing strategy? •
As organizations %ontinue to e'$and their su$$l# bases "an# are realizing hidden %ost &a%tors are a7e%ting the level o& benets that were $ro8e%ted to be a%hieved through this a$$roa%h In%reased %osts o& dealing with su$$liers outside the o do"esti% "aret dut# and tari7 %hanges that o%%ur over the li&e o& a su$$l# agree"ent in%reased inventor#related %osts asso%iated with global su$$l# %hains and rising levels o& logisti%s %ost volatilit# that %an o%%ur une'$e%tedl#
Evangelina Gonzalez Egonza59/0922644
1$. ic4 and discuss4 t(o components of the glo"al sourcing development model presented in this chapter. •
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(lanning is the rst ste$ in global $ro%ure"ent and involves an honest assess"ent o& global sour%ing o$$ortunities and %hallenges! he out%o"e o& this stage should be a set o& global $ro%ure"ent $oli%ies and $ro%edures that are %onsistent with an organization+s overall ob8e%tives ;onitoring and i"$roving "eans that $er&or"an%e "easures "ust be established &or global $ro%ure"ent s#ste"s and that these "easures should be reviewed on a regular basis! o"$arisons %an be "ade between a%tual and e'$e%ted $er&or"an%e and the results o& these %o"$arisons %an be used to i"$rove the global sour%ing $ro%ess
1&. What is total cost of o(nership and (hy is it important to consider? •
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otal ost o& 1wnershi$) r"s %onsider all the %osts that %an be assigned to the a%quisition use and "aintenan%e o& a $ur%hase ogisti%s %osts related to the t#$i%all# longer deliver# o lead ti"es asso%iated with global shi$"ents are a e# %onsideration! Ideall# r"s should %reate their own 1 "odels that $rovide a "ore realisti% view o& the %osts o& global sour%ing
Why are some #rms considering near-sourcing? e%entl# rising trans$ortation and energ# %osts growing desires to be able to qui%l# ada$t to %hanges "aret trends along with ris and sustainabilit# %on%erns have all inFuen%ed an e'a"ination o& nearsour%ing =$ro%uring $rodu%ts &ro" su$$lier %loser to one+s own &a%ilities> b# "an# r"s
1). 'ame4 and give an e3ample of4 the #ve dimensions of socially responsi"le purchasing. •
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?iversit# o ;inorit# or wo"enowned organization he environ"ent
Evangelina Gonzalez Egonza59/0922644 Caste redu%tion and the design o& $rodu%ts &or reuse or re%#%ling ,u"an rights o hild labor laws as well as sweatsho$ labor (hilanthro$# o E"$lo#ee volunteer e7orts and $hilanthro$i% %ontributions a&et# o a&e trans$ortation o& $ur%hased $rodu%ts as well as the sa&e o$eration o& relevant &a%ilities o
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1,. !iscuss some of the ethical issues that are associated (ith procurement. •
Areas o& ethi%al %on%ern in $ro%ure"ent in%lude gi&t giving and gi&t re%eiving- bribes ="one# $aid be&ore an e'%hange> and i%ba%s ="one# $aid a&ter an e'%hange>- "isuse o& in&or"ation- i"$ro$er "ethods o& nowledge a%quisitionl#ing or "isre$resentation o& the truth- $rodu%t qualit# =la% thereo&>- "isuse o& %o"$an# assets to in%lude abuse o& e'$ense a%%ounts- and %onFi%ts o& interest or a%tivit# that %reates a $otential %onFi%t between one+s $ersonal interest and the e"$lo#er+s interest
1/. !istinguish "et(een e3cess4 o"solete4 scrap4 and (aste materials. •
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E'%ess) sto% that e'%eeds the reasonable require"ents o& an organization $erha$s be%ause o& an overl# o$ti"isti% de"and &ore%ast 1bsolete) not liel# to ever be used b# the organization that $ur%hased it %ra$) "aterials that are no longer servi%eable not been dis%arded or are a b#$rodu%t o& the $rodu%tion $ro%ess Caste) those that have been s$oiled broen or otherwise rendered unt &or &urther use or re%la"ation
20. hould investment recovery "e the responsi"ility of the procurement manager? 7f yes4 (hy? 7f not4 (hich party 8parties9 should "e responsi"le for investment recovery?
Evangelina Gonzalez Egonza59/0922644 •
es the# should be res$onsible! (ro%ure"ent %reates e'%ess obsolete s%ra$ and waste "aterials there&ore the# should "anage it!
