Procurement and Supply Chain Management Flashcards

Flashcards covering key concepts from the Procurement and Supply Chain Management lecture notes, focusing on definitions, processes, and ethical considerations.

What are the key differences between procurement and purchasing?

Procurement is a strategic function involving a range of activities to obtain goods or services, while purchasing is the act of physically ordering and buying something.

What is a supply chain?

A network of individuals, organizations, technology, activities, and resources to ensure goods or services flow from raw materials to the end user.

What are the three main industry sectors in a supply chain?

The primary sector (extracting raw materials), the secondary sector (manufacturing), and the tertiary sector (providing services).

What is Supply Chain Management (SCM)?

SCM aims to reduce costs, improve value, and reduce risk throughout the supply chain, while maintaining ethical standards.

What is a Supply Chain Network (SCN)?

An extension of a supply chain that includes the links between various organizations involved in the entire supply process.

Explain Supply Chain Tiering.

The structured ordering and organization of suppliers, where Tier 1 suppliers supply the buyer directly, Tier 2 suppliers supply Tier 1 suppliers, and so on.

What are some risks associated with Complex Supply Chains beyond Tier 1 suppliers?

Buyers are more susceptible to compliance, ethics, and sustainability risks from suppliers outside Tier 1 due to reduced visibility and control.

What is logistics?

The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods, including services and related information.

Define Materials Management.

A part of the supply chain concerned with the flow of materials to, from, and inside manufacturing/production units, covering planning, handling, storage, inspection and issuing.

What is closed-loop recycling?

A recycling process where recycled waste can be reprocessed or repurposed indefinitely to make either new products or return to the environment as biodegradable waste.

What are the 'Five Rights' of Procurement?

The right quantity, the right quality, the right time, the right place, and the right price.

What is a performance specification?

A specification that outlines what a product or service is to do or achieve.

What is a conformance specification?

A specification details exactly what the product or service will consist of.

What is Whole-Life Costing (WLC)?

A method encompassed the overall costs associated with owning or using an asset, item or service from acquisition through to end of life.

What is Total Cost of Acquisition (TCA)?

The total cost incurred in acquiring a product from sourcing to receiving and installing.

Define 'Value for Money' in the public sector context.

The best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought

What is direct procurement?

The sourcing and supply of products or services that are directly used in the final product or service offered by an organization.

What is indirect procurement?

The purchasing of goods and services to enable business operations, but not directly used in the final product.

Describe Capital Expenditure (CAPEX).

Expenditure on assets that yields benefits over a long period of time.

Describe Operational Expenditure expenditures (OPEX).

Recurring costs needed for running a business.

What is key point to include in a service specification?

A service specification should contain as much detail as possible.

What are key roles in the CIPS Procurement Cycle?

CIPS Procurement Cycle is a basis for the sourcing process, analysis of the procurement cycle, and the evaluation of the influence procurement and supply has as a source of value for the organization.

What is the impact from logistics management to the supply chain?

Logistics processes brings processes together to ensure that the consumer receives their goods to each stage of the supply chain.