SCMN 2150 exam 2 (5,6,7,8) |71 Q’s and A’s
What is procurement - -the purchase of merchandise or services at the
optimum possible total cost in the correct amount and quality
- How has procurement shifted from the tactical level? - -shifted from
tactical to strategic sourcing
- What are the different types of procurement purchases? - -Production
purchases
-Direct Materials: used in production and affects product value
-Indirect Materials: used outside production process
Services
Capital Equipment
Finished Goods
- What are the different types of Procurement goods? - -Distinctive Goods -
limited supplies, unique items (high risk, low spending)
Critical Goods - strategic suppliers, key components (high risk, high
spending)
Generic Goods- readily available, not production items (low risk, low
spending)
Commodity Goods- multiple suppliers, basic production items (low risk, high
spending)
- What instances do you use a formal step-by-step procurement process? - -
major, high value purchases
- What is the differentiating power of procurement? - -it is no longer
hammering down prices only; whats needed is a different attitude to external
partnering—understanding themarket environment, your vendors, their
strategies, and what makes them tick
- Focus of Procurement and Strategic Sourcing? - -Buy Products and
Services (right place, source, specification, quantity, delivery time, internal
customer)
by understanding business requirements, streamlining purchasing processes
and identifying better sources of supply
- What is the procurement process? - -Identify material & service needs
Evaluate supplier options
Select supplier
Release orders and receive products
, Measure and manage performance
- What is the most important step for strategic procurement? - -
- What is strategic sourcing? - -an institutional procurement process that
continuously improves and re-evaluates the purchasing activities of a
company
-focuses on total cost of ownership, being data driven, and relationships with
suppliers
-figure out what to buy from whom to achieve quality, timeliness, lower cost
- What is total cost of ownership? - -sum of all costs with every activity of
the supply stream
- What is a make or buy analysis? - -the process of determining the most
attractive alternative involves comparing the costs avoided to costs of
outsoursing
- What is outsourcing? - -obtain (goods or a service) from an outside or
foreign supplier, especially in place of an internal source.
- What metrics or KPIs are used in selecting suppliers and evaluating
Supplier Performance? - -Fill Rate = Total Qty Received/ Total Qty Ordered
Defect Rate = Total Qty Defective/Tital Qty Received
On Time Delivery = On-time orders / total orders
- Strategic sourcing differs from conventional purchasing because... - -it
places emphasis on total cost of ownership
- T/F Strategic sourcing is a formalized procurement program that partners
company's with their suppliers - -True
- Strategic sourcing involves measuring... - -performance and continual
process improvement
- Strategic sourcing initiatives fail primarily due to legacies of: - -1. lack of
measures/KPIs
2. unwillingness to change by people
3. lack of executive support
- According to the reading, what is the first large scale planning change
supply chain managers are doing? - -expand supply base
What is procurement - -the purchase of merchandise or services at the
optimum possible total cost in the correct amount and quality
- How has procurement shifted from the tactical level? - -shifted from
tactical to strategic sourcing
- What are the different types of procurement purchases? - -Production
purchases
-Direct Materials: used in production and affects product value
-Indirect Materials: used outside production process
Services
Capital Equipment
Finished Goods
- What are the different types of Procurement goods? - -Distinctive Goods -
limited supplies, unique items (high risk, low spending)
Critical Goods - strategic suppliers, key components (high risk, high
spending)
Generic Goods- readily available, not production items (low risk, low
spending)
Commodity Goods- multiple suppliers, basic production items (low risk, high
spending)
- What instances do you use a formal step-by-step procurement process? - -
major, high value purchases
- What is the differentiating power of procurement? - -it is no longer
hammering down prices only; whats needed is a different attitude to external
partnering—understanding themarket environment, your vendors, their
strategies, and what makes them tick
- Focus of Procurement and Strategic Sourcing? - -Buy Products and
Services (right place, source, specification, quantity, delivery time, internal
customer)
by understanding business requirements, streamlining purchasing processes
and identifying better sources of supply
- What is the procurement process? - -Identify material & service needs
Evaluate supplier options
Select supplier
Release orders and receive products
, Measure and manage performance
- What is the most important step for strategic procurement? - -
- What is strategic sourcing? - -an institutional procurement process that
continuously improves and re-evaluates the purchasing activities of a
company
-focuses on total cost of ownership, being data driven, and relationships with
suppliers
-figure out what to buy from whom to achieve quality, timeliness, lower cost
- What is total cost of ownership? - -sum of all costs with every activity of
the supply stream
- What is a make or buy analysis? - -the process of determining the most
attractive alternative involves comparing the costs avoided to costs of
outsoursing
- What is outsourcing? - -obtain (goods or a service) from an outside or
foreign supplier, especially in place of an internal source.
- What metrics or KPIs are used in selecting suppliers and evaluating
Supplier Performance? - -Fill Rate = Total Qty Received/ Total Qty Ordered
Defect Rate = Total Qty Defective/Tital Qty Received
On Time Delivery = On-time orders / total orders
- Strategic sourcing differs from conventional purchasing because... - -it
places emphasis on total cost of ownership
- T/F Strategic sourcing is a formalized procurement program that partners
company's with their suppliers - -True
- Strategic sourcing involves measuring... - -performance and continual
process improvement
- Strategic sourcing initiatives fail primarily due to legacies of: - -1. lack of
measures/KPIs
2. unwillingness to change by people
3. lack of executive support
- According to the reading, what is the first large scale planning change
supply chain managers are doing? - -expand supply base
