OMIS 320 Chapter 4 - Ethical and Sustainable Sourcing

Vocabulary flashcards covering key terms and definitions from Chapter 4 of Wisner 6th Edition (OMIS 320) on Ethical and Sustainable Sourcing.

Business Ethics

The application of ethical principles to business situations, also referred to as corporate social responsibility.

Utilitarianism

An ethical theory stating that an act is ethical if it creates the greatest good for the greatest number of people.

Rights and Duties

An ethical philosophy where actions are judged as right in themselves or not, without regard to their consequences.

Ethical Sourcing

A sourcing approach that considers the public consequences of organizational buying and seeks positive social change through purchasing behavior.

Sustainable Sourcing

Purchasing goods and services while considering long-term effects on people, profit, and the planet.

Green Purchasing

A practice where purchased products and materials meet environmental objectives such as waste reduction, hazardous-material elimination, recycling, remanufacturing, and material reuse.

Ethical Trading Initiative (ETI)

An alliance of organizations working to improve working conditions and implement the ETI Base Code.

Fair Trade Product

A product manufactured or grown by a disadvantaged producer in a developing country who receives a fair price.

ETI Base Code

A code containing nine clauses covering freely chosen employment, freedom of association/collective bargaining, safe and hygienic working conditions, no child labor, living wages, non-excessive working hours, no discrimination, regular employment, and no harsh or inhumane treatment.

Functional Products

MRO materials and other commonly purchased items and supplies characterized by low profit margins, relatively stable demand, and high competition.

Innovative Products

Newer products such as control mechanisms, software applications, or robotic systems characterized by short product life cycles, volatile demand, high profit margins, and relatively less competition.

Outsourcing

The practice of buying materials, parts, services, and/or assembled components from suppliers so a firm can concentrate more resources and time on its core business activities.

Value Engineering

Techniques suppliers use to help buying firms design better quality and cost savings into products from the time a product first reaches the shelves.

Vendor-Managed Inventory (VMI)

An inventory model, popularized by Wal-Mart, where suppliers manage buyer inventories to reduce inventory carrying costs and avoid stockouts by tracking inventory, determining delivery schedules, order quantities, setup, and shipments.

Co-Managed Inventory

A shared or controlled form of Vendor-Managed Inventory (VMI) in which the buyer and supplier agree on information sharing, order quantities, order triggers, and delivery timing.

Strategic Alliance Development

Improving the capabilities of key trading partners to achieve better market penetration, access to new technologies and knowledge, and improved service.

Benchmarking

The process of copying what other businesses do best to quickly improve sourcing practices and supply chain performance.

Strategic Sourcing

An approach focused on managing a firm's external resources to support long-term goals, including ethical/sustainable initiatives, supplier relationships, supplier selection, and performance monitoring.

Modern Sourcing Goals

Sourcing objectives focused on reducing dependence on a few foreign suppliers, reducing delivery cycle times and carbon footprints, and improving quality, customer service, and ethical reputations.

Top 3 Responsibilities of Purchasing Professionals

The primary duties of purchasing professionals, which consist of negotiating contracts, selecting suppliers, and managing supplier relationships.