Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
71 Cards in this Set
- Front
- Back
|
What are the 7 steps of supplier selection, evaluation, and development?
|
1. Recognize the need for supplier selection
2. Identify key sourcing requirements 3. Determine sourcing strategy 4. Identify potential supply sources 5. Limit suppliers in selection pool. 6. Determine method of supplier evaluation and selection 7. Select supplier and reach agreement. |
|
|
What are some key sourcing topics, global vs. intermediaries?
|
Direct Global Purchase - Lower costs, extra costs (shipping), develop relationship with producers, diversify inventory, lack of country knowledge, lack of volume for clout
Intermediaries - rely on experts for purchase, importation, delivery, and financial risk, one currency/language, possible higher delays and communication barriers |
|
|
What are some different types of sourcing strategies?
|
Single vs. multiple sources; short-term vs. long term contracts; domestic vs. foreign supplier; type of relationship
|
|
|
How do you identify different supply sources?
|
International industrial directories, trade shows, trade consulates, trading companies, agents/brokers, banks, embassies, suppliers
|
|
|
How do we evaluate suppliers?
|
eval of previous preformance
eval of supplier provided info (RFP, RFQ, RFT, site visits, strategic alignment |
|
|
What are the 7 steps of supplier selection, evaluation, and development?
|
1. Recognize the need for supplier selection
2. Identify key sourcing requirements 3. Determine sourcing strategy 4. Identify potential supply sources 5. Limit suppliers in selection pool. 6. Determine method of supplier evaluation and selection 7. Select supplier and reach agreement. |
|
|
What are some key sourcing topics, global vs. intermediaries?
|
Direct Global Purchase - Lower costs, extra costs (shipping), develop relationship with producers, diversify inventory, lack of country knowledge, lack of volume for clout
Intermediaries - rely on experts for purchase, importation, delivery, and financial risk, one currency/language, possible higher delays and communication barriers |
|
|
What are some different types of sourcing strategies?
|
Single vs. multiple sources; short-term vs. long term contracts; domestic vs. foreign supplier; type of relationship
|
|
|
How do you identify different supply sources?
|
International industrial directories, trade shows, trade consulates, trading companies, agents/brokers, banks, embassies, suppliers
|
|
|
How do we evaluate suppliers?
|
eval of previous preformance
eval of supplier provided info (RFP, RFQ, RFT, site visits, strategic alignment Financial Analysis |
|
|
What are the 3 ways of evaluating performance?
|
Categorical (w/Likert scale)
Weighted Evaluation Cost-based |
|
|
What are RFQ's?
|
RFQ – Request for quote: requests price for standard products that may be purchased in varying quantities and routinely pruchased with a purchase order (PO)
commodity/standardized product |
|
|
What are RFP's?
|
RFP – Request for proposal: solicits proposals for both price and approach to technical method. Typically based on a requirements specification. An RFP modifies the original contract intent by describing the supplier’s technical solution. Therefore, the final contract language must be reached through negotiation.
greater detailed non standardized product |
|
|
What are the 7 steps of supplier selection, evaluation, and development?
|
1. Recognize the need for supplier selection
2. Identify key sourcing requirements 3. Determine sourcing strategy 4. Identify potential supply sources 5. Limit suppliers in selection pool. 6. Determine method of supplier evaluation and selection 7. Select supplier and reach agreement. |
|
|
What are some key sourcing topics, global vs. intermediaries?
|
Direct Global Purchase - Lower costs, extra costs (shipping), develop relationship with producers, diversify inventory, lack of country knowledge, lack of volume for clout
Intermediaries - rely on experts for purchase, importation, delivery, and financial risk, one currency/language, possible higher delays and communication barriers |
|
|
What are some different types of sourcing strategies?
|
Single vs. multiple sources; short-term vs. long term contracts; domestic vs. foreign supplier; type of relationship
|
|
|
How do you identify different supply sources?
|
International industrial directories, trade shows, trade consulates, trading companies, agents/brokers, banks, embassies, suppliers
|
|
|
How do we evaluate suppliers?
|
eval of previous preformance
eval of supplier provided info (RFP, RFQ, RFT, site visits, strategic alignment Financial Analysis |
|
|
When evaluating on frequency how do we break down the evaluation?
|
Operational - monthly
1. Delivery reliability (on-time) 2. Product/service quality 3. Delivery speed Cost/Price - semi annually 1. price 2. cost Strategic - annually 1. Process capability 2. Volume flexibility 3. Development speed (new products) 4. Design quality 5. Technological capability 6. Managerial capability 7. Product line breadth 8. Financial health (of your firm)* 9. Third party quality award* |
|
|
According to Prahinski and Fan what should we focus on when evaluating?
|
Focus on evaluation quality.
Evaluation quality is a significant mediator for the relationship between communication and performance. As indicated in the prior literature, we expect suppliers’ commitment is another significant outcome of evaluation content and frequency. |
|
|
What is AHP and know how to calculate it.
|
Analytic Hierarchy Process
Construct the decision hierarchy (Fig.1) Determine the weightings (relative importance) of attributes and sub-attributes Evaluate the performance of each alternative Check consistency |
|
|
Financial Analysis - liquidity
What are Quick Ratio's and Current Ratio's? |
Current Ratio = current assets/current liabilities
Quick Ratio = (current assets – inventory)/current liabilities |
|
|
Financial Analysis - Activity
Inventory turnover Avg collection period Total asset turnover |
Inventory turnover = COGS/inventory
Average collection period = Receivables/ (sales/365) Total asset turnover = COGS/total assets |
|
|
Financial Analysis - profitability
Net Profit Margin ROE ROA |
Net profit margin = profit after tax/ sales
ROE = net income available to common stockholders/common equity ROA = net income after preferred dividends / total assets |
|
|
Financial Analysis - Leverage (debt)
debt-to-equity TIE (times interest earned) |
Debt-to-Equity = total debt/total equity
Times interest earned (TIE) = EBIT/interest charges |
|
|
What are SG&A expenses?
what is EBIT |
Selling, General & Administrative expenses
Earnings Before Interest and Taxes |
|
|
If a supplier is found to be high risk what are some of the alternatives?
|
Develop the supplier
Find an alternative supplier Bring the production in-house |
|
|
What are some of the ways we can develop the supplier?
|
Coercive pressure
Reward and incentive pressure Evaluation feedback Direct involvement -training and site visits |
|
|
What is E-Procurement?
|
Electronic Procurement, the acquiring of supplies, work, and services through the internet. As well as information and networking systems like EDI and ERP.
|
|
|
What is EDI and ERP?
|
Electronic Data Interchange - Information systems that help keep data current to prevent bull whips
ERP - Enterprise Resource Planning systems - systems that integrate the business process so that all data can be absorbed into the system and used for analysis |
|
|
What are p-cards?
|
Procurement Cards - cards that are similar to credit cards that allow small purchases to be made electronically without going through the entire procurement process
|
|
|
How do EDI's make a supply chain more efficient?
|
Information like orders, shipments, delivery dates/locations, it eliminates human entry error. EDI has been used since the 1070's in VAN's value added networks (routine documents, purchase orders, billing and shipping manifests)
|
|
|
What are the 4 main e-procurement tools?
|
Communication/Information sharing
Transaction Support Decision Support Systems Collaboration tools |
|
|
What are the benefits of e-procurement?
|
Simplifies purchasing and payment process
Lowers price Reduces average inventory Reduces head count Enables supply base rationalization (the right number of suppliers) Frees up staff time so that they can focus on strategic issues Reduces maverick buying Improves monitoring of supplier performance Improves order traceability Requires culture changes |
|
|
What are the 3 main types of catalogs used today
|
The Sell-side catalogs, e.g., Sear, Roebuck and Co.
The buy-side catalogs Third-party catalogs |
|
|
What are sell-side catalogs?
|
Sell-side catalogs are electronic catalogs provided by the supplier:
The potential buyers can browse products and/or services provided on-line Buyers have access 24/7 (24 hours, seven days per week) Suppliers can keep data up-to-date easily Suppliers can save advertising costs |
|
|
What are buy-side catalogs?
|
Catalogs created by the buying firm, usually for pre-negotiated prices, specifications and terms
Reduces communication costs, increases security, increases access to many catalogs via same intranet application Large investment in clerical resources to set up system. Suppliers must provide data in standard format. ex. Flexbiz |
|
|
What is a 3rd party catalog?
|
A buying consortium using a market-side or master catalog
Responsible for managing and updating information resides with the suppliers Provides a standard format to a large number of buyers |
|
|
What is an auction?
|
Buyers compete with each other for the purchase of the product.
Sellers have control and power; they set opening price (with help from auction house). Examples: Sotheby’s and Christie’s |
|
|
What is an E-auction?
|
An auction that is performed electronically. Enables the sales period for the product to be extended over a wider time horizon. Enables a larger number of participants in the process.
Example: e-bay |
|
|
What are reverse auctions?
|
Reverse auctions are a new form of auctions, typically used by large organizations to purchase standardized products. The main difference between auctions and reverse auctions is that the buyer takes responsibility for and control of the negotiation process. Multiple sellers of a product (or service) are vying for the business of a single buyer, resulting in the price being driven down.
|
|
|
What are the steps in a Reverse Auction?
|
1. Determine which contracts
2. Determine which suppliers 3. RFQ 4. Reverse auction 5. Award business |
|
|
What are the major considerations when choosing to do a reverse auction?
|
Commodity Products
Price is major criterion Non-critical to company strategy 4+ suppliers available Volume must be sufficiently large Supply should be larger than demand |
|
|
What are some advantages of a reverse auction?
|
Access to new markets
Clear indication of how to win business Good source of market price information Quick negotiation process Cost savings are significant, averaging 11% Time to acquire is shorter than traditional process Access to wider range of suppliers, including global |
|
|
What are some disadvantages of a reverse auction?
|
based on a win-lose approach
shifts relationship to be transactional (arms length) tends to have an adverse effect on long-term relationships -suppliers can't keep costs so low for long periods of time |
|
|
What are metrics? and what is their role?
|
A verifiable measure stated in quantitative (e.g., 95% inventory accuracy) or qualitative terms and intended to close the gap between value, strategy and specific activities.
Measure Monitor Control Direct Teach |
|
|
Name and describe the 5 roles of metrics
|
Measure – determine performance
Monitor – track system performance over time Control – compare performance to standards and direct management attention to areas of needed improvement Direct – align employee motivation and reward systems Teach – by what we measure and do not measure |
|
|
What is the difference between output and performance metrics?
|
Output metrics - Pertains to the output of the product or service
Ex. -Quality (defects per million) -Delivery (% delivered on time) -Cost (Total $ spent) Process metrics - Pertains to the performance of the process An example: ISO certification |
|
|
What is ISO?
|
International Standards Organization
ISO doesn't actually certify companies output, rather grade on the quality of the business process. 3rd party audits are preformed by CB's or Accredited Certified Bodies |
|
|
What are the main differences between ISO 9000 and ISO 14000
|
ISO 9000 focus's on how a companies production process rather than the output
ISO 14000 is geared towards environmental friendliness and waste |
|
|
What is SCOR?
|
Supply Chain Operations Reference by the supply chain council
|
|
|
What is benchmarking?
|
In business benchmarking is measuring a business across several processes
benchmarking is used to determine "best in class" |
|
|
What are the 4 types of benchmarking and their definitions?
|
Internal Benchmark - An operating unit or function is compared with a similar business within the same industry
Functional Benchmark - A function is compared to the best external practitioners, regardless of industry Competitive Benchmark - Comparing organizational performance against competing firms Strategic Benchmark - Evaluating and comparing strategies of competing firms |
|
|
What are some pros and cons of benchmarking?
|
pros- shows who's best in class, impetus to demand change, data gathering, enhances knowledge
cons - implies only one method, may be out of date, comparisons may be difficult due to customization and price drivers |
|
|
What are the 5 processes of benchmarking?
|
Planning
-Establish team, decide what to benchmark, establish performance measures for the key activities, determine data availability Analysis -Obtain information on performance organization, identify lessons learned Integration -Make recommendation on lessons learned, establish targets Action -Develop action plan, develop system to communicate progress Maturity – continuous improvement |
|
|
What are the 3 approaches to supply base selection and optimization?
|
Single source – selected one source from several (or many) possible sources
“Sole source” – only one available supplier Multiple sources Hybrid approach: Dual-sourcing – two sources per item Often primary and secondary supplier Single-source by item, multiple-source by category Advantages of single-sourcing for each item Additional suppliers in supply base with same capabilities reduce risk, switching cost Mixed insourcing/outsourcing In-house capability serves as second supplier Maintain internal knowledge of technology, costs, etc |
|
|
What is Ariba and what are the main focuses of it?
|
A 3rd party catalog that helps to save money in the supplier selection and management process
Analyze Source Contract Procure Pay Manage |
|
|
What are the 4 driving forces of globalization and their sub categories
|
Technological
-diffusion of knowledge -technological collaboration -Global expertise (r&d) Economic -labor cost -cost of new product development -cost of capitol intensive facilities -currency fluctuations Global market forces -foreign competition in local markets - availability of new products - diversification of market risk - state-of-the art markets - global information Political Forces - regional trade agreements - trade protection mechanisms - need for counter trade - meeting national standards |
|
|
What are tariffs?
|
a tax on foreign goods upon importation
|
|
|
What are import quotas?
|
A protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given time period.
|
|
|
What is dumping?
|
Any kind of predatory pricing
Exporting a product to another country at a price which is either below the price it charges in its home country or is below its cost of production Under WTO, it is condemned if it threatens to cause material injury in the importing country |
|
|
What is counter-trade?
|
Governments use or require countertrade exchanges, particularly in countries that lack hard currency.
The US govt. will not oppose companies’ countertrade participation. |
|
|
What is Barter?
|
exchange of goods or services directly for other goods or services without money
Counter purchase (or trade): Sale to a country in exchange for promises to make a future purchase of a specific product in that country |
|
|
What is switch trading?
|
A firm sells to another its obligation to make a purchase in a given country
|
|
|
What is buy back?
|
A firm builds a plant in a country and agrees to take a % of the plant’s output as partial payment for the contract
|
|
|
What is offset?
|
A company will offset a hard-currency purchase of an unspecified product from a country in the future
|
|
|
what is Maverick buying?
|
When people in an organization purchase things when they aren't in the purchasing department
|
|
|
What is RFT?
|
Request for Tender - for a very complex product with very detailed specifications sometimes even requires a blueprint
|
|
|
What are 3 firms that gather financial information about companies?
|
Hoovers.com
RMA.com (robert morris associates) Dunn & Bradstreet |
|
|
Covisent and Ariba are examples of what?
|
3rd Party catelogs
|
|
|
What are the 4 categories for Supplier Development Strategies?
|
Supplier evaluation (appraisal)
Reward/Incentives Direct Involvement -site visits, training Competitive Pressure - best for commodity markets, with arm length transactions |
