SCMN 3730 Exam 1 Questions and
Answers
Sourcing - ANSWER-Strategic approach to supplier selections, development, and
management implemented to achieve improved business results
Key events that have defined the supply chain operating environment - ANSWER--
Complex security requirements resulting from 9/11 attack
-Increasing regulations from Enron debacle → Sarbanes-Oxley
-Advancing technology enabling supply chain integration
-Globalizing markets
Industry that places a greater strategic importance on the procurement process -
ANSWER-The Chemical Industry puts the biggest emphasis on procurement
process, because 2/3 of every dollar spent goes to purchase materials necessary for
the production of a product. After that industry is Manufacturing, Service, and public.
Primary responsibilities of procurement - ANSWER--Identify and select suppliers,
negotiate contracts
-Source of supply research (Long-range material forecasts, Boundary scanning)
-Operational support and follow-up (Releasing orders, Changing orders, Expediting
orders)
-Functional administration and support
Expectations (output) of procurement functions - ANSWER--generate cost-reduction
-improve supplier quality
-gain access to new sources of supply & technology
-Improve supply chain cycle time
How procurement (function) adds value - ANSWER--Supporting enterprise sourcing
requirements by providing uninterrupted flow of high-quality material, supplies,
services
-Managing purchasing processes efficiently / effectively using a limited number of
resources
-Developing reliable, high-quality sources of supply
-Developing strong cross-functional relationships
-Supporting organizational goals and objectives
-Developing aligned / integrated purchasing strategies that support company's goals
and objectives
The 6 R's of sourcing - ANSWER-o Right Supplier
o Right Specification
o Right Quantity
o Right Time
o Right Location
o Right Price
, Order fulfillment process - ANSWER-supplier -> producer -> customer
Business Process - ANSWER-A collection of structured, related activities that
produce a specific service or product or serve a particular goal for a customer; can
be visualized with a flowchart as a sequence of activities
Business Process Flowchart - ANSWER-a roadmap for implementation; it outlines
the expected outcome and provides something concrete to build from; a sequence of
activities
P2P Process Objective - ANSWER-acheive the best landed cost; process of
obtaining and managing the raw materials needed for manufacturing a product or
providing a service
P2P Process Steps - ANSWER--Select (sourcing; select supplier, negotiate contract)
-Requisition (approval, ordering, & changes)
-Process (verification, matching & auditing)
-Pay (authorization and payment)
P2P 3-way match - ANSWER-Purchase order, receiving report, and invoice are
matched against each other; helps safeguard an organizations assets
Sourcing Process Steps - ANSWER-o Research Purchase Categories
o Strategize & Plan Initiatives
o Supplier Selection
o Negotiate Contract
o Varification
Benchmarking - ANSWER-striving for the best practice; Helps identify what other
similar organizations are doing to address similar business issues; Helps improve
productivity and competitiveness; Utilizes resources more effectively by not
"reinventing the wheel"
Business Process Improvement (BPI) - ANSWER-o Focus on "doing things right"
o Reduce variation and waste
o Overall objective is break through change in performance of process rather than
series of incremental change
Benefits of a Procedure Manual - ANSWER--Offers a tool for consistency of action
-Provides means of training employees
-Allows for documenting "industry-best" practices
ISO 9000 certification - ANSWER-A third party regulatory agency, that issues
certifications to businesses verifying that the organization has a sound set of
operational instructions in place; Benefits: Winning contracts, because it shows they
have a plan, it also makes an organization run more smoothly
Policy - ANSWER-what a company requires from it's employee; established
purposes, principles, and rules of action that guide an organization
Answers
Sourcing - ANSWER-Strategic approach to supplier selections, development, and
management implemented to achieve improved business results
Key events that have defined the supply chain operating environment - ANSWER--
Complex security requirements resulting from 9/11 attack
-Increasing regulations from Enron debacle → Sarbanes-Oxley
-Advancing technology enabling supply chain integration
-Globalizing markets
Industry that places a greater strategic importance on the procurement process -
ANSWER-The Chemical Industry puts the biggest emphasis on procurement
process, because 2/3 of every dollar spent goes to purchase materials necessary for
the production of a product. After that industry is Manufacturing, Service, and public.
Primary responsibilities of procurement - ANSWER--Identify and select suppliers,
negotiate contracts
-Source of supply research (Long-range material forecasts, Boundary scanning)
-Operational support and follow-up (Releasing orders, Changing orders, Expediting
orders)
-Functional administration and support
Expectations (output) of procurement functions - ANSWER--generate cost-reduction
-improve supplier quality
-gain access to new sources of supply & technology
-Improve supply chain cycle time
How procurement (function) adds value - ANSWER--Supporting enterprise sourcing
requirements by providing uninterrupted flow of high-quality material, supplies,
services
-Managing purchasing processes efficiently / effectively using a limited number of
resources
-Developing reliable, high-quality sources of supply
-Developing strong cross-functional relationships
-Supporting organizational goals and objectives
-Developing aligned / integrated purchasing strategies that support company's goals
and objectives
The 6 R's of sourcing - ANSWER-o Right Supplier
o Right Specification
o Right Quantity
o Right Time
o Right Location
o Right Price
, Order fulfillment process - ANSWER-supplier -> producer -> customer
Business Process - ANSWER-A collection of structured, related activities that
produce a specific service or product or serve a particular goal for a customer; can
be visualized with a flowchart as a sequence of activities
Business Process Flowchart - ANSWER-a roadmap for implementation; it outlines
the expected outcome and provides something concrete to build from; a sequence of
activities
P2P Process Objective - ANSWER-acheive the best landed cost; process of
obtaining and managing the raw materials needed for manufacturing a product or
providing a service
P2P Process Steps - ANSWER--Select (sourcing; select supplier, negotiate contract)
-Requisition (approval, ordering, & changes)
-Process (verification, matching & auditing)
-Pay (authorization and payment)
P2P 3-way match - ANSWER-Purchase order, receiving report, and invoice are
matched against each other; helps safeguard an organizations assets
Sourcing Process Steps - ANSWER-o Research Purchase Categories
o Strategize & Plan Initiatives
o Supplier Selection
o Negotiate Contract
o Varification
Benchmarking - ANSWER-striving for the best practice; Helps identify what other
similar organizations are doing to address similar business issues; Helps improve
productivity and competitiveness; Utilizes resources more effectively by not
"reinventing the wheel"
Business Process Improvement (BPI) - ANSWER-o Focus on "doing things right"
o Reduce variation and waste
o Overall objective is break through change in performance of process rather than
series of incremental change
Benefits of a Procedure Manual - ANSWER--Offers a tool for consistency of action
-Provides means of training employees
-Allows for documenting "industry-best" practices
ISO 9000 certification - ANSWER-A third party regulatory agency, that issues
certifications to businesses verifying that the organization has a sound set of
operational instructions in place; Benefits: Winning contracts, because it shows they
have a plan, it also makes an organization run more smoothly
Policy - ANSWER-what a company requires from it's employee; established
purposes, principles, and rules of action that guide an organization
