Lecture on Sourcing Strategies and Business Management

Flashcards created to help students review and memorize key terms and definitions related to sourcing strategies and business management concepts.

EFMD

European Foundation for Management Development, an international organization that promotes management development and quality improvement in business education.

Sourcing Strategy

A plan for acquiring goods and services that focuses on maximizing profit by finding the best costs and conditions for materials.

Make or Buy Decision

The process of deciding whether to produce a product in-house or to purchase it from an external supplier.

Outsourcing

Contracting with independent suppliers outside the organization to provide products or services that could be done internally.

Backsourcing

The process of returning previously outsourced activities back to the organization to be performed internally.

Single Sourcing

Relying on one supplier for purchasing a certain material.

Multiple Sourcing

Purchasing a certain material from several suppliers to reduce risk and promote competition.

Low-Cost Country Sourcing (LCC)

Sourcing from suppliers located in countries with lower costs for labor and materials.

Nearshoring

Relocating sourcing to countries geographically closer to the home country of the organization.

Reshoring

Bringing the sourcing of products and services back to the country of origin after outsourcing.

Domestic Sourcing

Relying on local suppliers for procurement needs.

International Sourcing

Conducting procurement transactions with suppliers located in different countries.

Break-Even Analysis

A calculation to determine the point at which total revenues equal total costs, allowing for assessment of profitability.

Strategic Sourcing

A continuous process that improves and reevaluates the purchasing activities of a company.

Supplier Monitoring

The process of assessing supplier performance and quality to ensure standards are met.

Just-in-Time (JIT) Delivery

An inventory strategy that aims to reduce waste by receiving goods only as they are needed.

Transportation Costs

Expenses associated with the transportation of goods, which can impact overall sourcing decisions.

Customs Duty

A tariff levied on goods transported across international borders, affecting the cost of international purchasing.