SCM FINAL EXAM REVIEW QUESTIONS
Procurement and Supply Management (definition) - Answers - -The
identification,acquisition, access, positioning, and management of resources the
organization needs in attainment of its strategic objectives.
Evolution of PSM (and reason behind it) - Answers - -Purchasing has continuously
become more important and global since 1900s (tactical to strategic)
-Due to shortage of raw material, oil prices, customer expectations, internet, recession
Objectives of PSM (5): - Answers - -Supply continuity
-Manage the purchasing process efficiently and effectively
-Develop the supply base
-Develop aligned goals with internal functional stakeholders
-Develop integrated purchasing strategies that support organizational objectives
Responsibilities of PSM (4): - Answers - -Evaluate and select suppliers
-Review specifications
-Act as the primary contact with suppliers
-Determine the method of awarding purchase contracts
How to push PSM to the next level: - Answers - -By working together with suppliers i.e.
new product development
Goal of Supply Strategy Implementation: - Answers - -To identify which objectives are
most important/valuable to a company
Functional Organization Goals (key to them, 4 goals): - Answers - -Internal integration
rather than just functional performance of each
1. Purchasing
2. Production
3. Logistics
4. Marketing
SCOR Model (purpose): - Answers - -To map out company's and supplier's operations
and goals to develop integrated supply chain
Product-Process Matrix (defined and purpose): - Answers - - Aligns product vs process
structure and life cycle stages
-To identify the correct process to reach optimal performance for product.
Red Ocean vs Blue Ocean - Answers - -Compete in existing market space vs Create
uncontested market space
-Beat the competition vs Make the competition irrelevant
, -Exploit existing demand vs Create new demand
Resource-Based Theory (defined, purpose) - Answers - -Emphasizes management of
internal sources to establish a unique skill set.
-Unique skills/processes create a competitive advantage.
Purchasing should primarily be ____. But when resources can't be wasted, be _____. -
Answers - -Proactive
-Reactive
Organizational Structure (defined):
-Differentiate purchasing based on (3): - Answers - -The formal system of
communication, division of labor, coordination, control, authority, and responsibility to
achieve goals
1. region
2. importance of commodity
3. level of centralization in company
Pros and Cons of Centralized Purchasing - Answers - Pros
-Maximize buying power and leverage
-Can monitor all purchasing activities from central location
Cons
-Not keyed in to different needs and requirements of processes and products
-Too dependent on too few products.
Pros and Cons of Decentralized Purchasing - Answers - Pros
-More responsive to local production demands
-More aware of what materials give best overall cost and quality
-Better relationships developed with suppliers
Cons
-Different sites/divisions may be buying same product at different price.
-Multiple supplier contacts and more orders and payables overall for organization to
handle
-No complete information about total spend across enterprise.
The Purchasing Process (6 steps) - Answers - 1. Forecast and plan requirement
2. Need clarification/requisition
3. Supplier identification/selection
4. Approval/Contract/P.O generation
5. Receive material & documents
6. Settle, pay, and measure performance
Three documents used for supplier identification: - Answers - -RFI (request for info): find
out what is possible; very general.
-RFP (request for proposal): send blueprint to supplier, request for any improvements of
product
Procurement and Supply Management (definition) - Answers - -The
identification,acquisition, access, positioning, and management of resources the
organization needs in attainment of its strategic objectives.
Evolution of PSM (and reason behind it) - Answers - -Purchasing has continuously
become more important and global since 1900s (tactical to strategic)
-Due to shortage of raw material, oil prices, customer expectations, internet, recession
Objectives of PSM (5): - Answers - -Supply continuity
-Manage the purchasing process efficiently and effectively
-Develop the supply base
-Develop aligned goals with internal functional stakeholders
-Develop integrated purchasing strategies that support organizational objectives
Responsibilities of PSM (4): - Answers - -Evaluate and select suppliers
-Review specifications
-Act as the primary contact with suppliers
-Determine the method of awarding purchase contracts
How to push PSM to the next level: - Answers - -By working together with suppliers i.e.
new product development
Goal of Supply Strategy Implementation: - Answers - -To identify which objectives are
most important/valuable to a company
Functional Organization Goals (key to them, 4 goals): - Answers - -Internal integration
rather than just functional performance of each
1. Purchasing
2. Production
3. Logistics
4. Marketing
SCOR Model (purpose): - Answers - -To map out company's and supplier's operations
and goals to develop integrated supply chain
Product-Process Matrix (defined and purpose): - Answers - - Aligns product vs process
structure and life cycle stages
-To identify the correct process to reach optimal performance for product.
Red Ocean vs Blue Ocean - Answers - -Compete in existing market space vs Create
uncontested market space
-Beat the competition vs Make the competition irrelevant
, -Exploit existing demand vs Create new demand
Resource-Based Theory (defined, purpose) - Answers - -Emphasizes management of
internal sources to establish a unique skill set.
-Unique skills/processes create a competitive advantage.
Purchasing should primarily be ____. But when resources can't be wasted, be _____. -
Answers - -Proactive
-Reactive
Organizational Structure (defined):
-Differentiate purchasing based on (3): - Answers - -The formal system of
communication, division of labor, coordination, control, authority, and responsibility to
achieve goals
1. region
2. importance of commodity
3. level of centralization in company
Pros and Cons of Centralized Purchasing - Answers - Pros
-Maximize buying power and leverage
-Can monitor all purchasing activities from central location
Cons
-Not keyed in to different needs and requirements of processes and products
-Too dependent on too few products.
Pros and Cons of Decentralized Purchasing - Answers - Pros
-More responsive to local production demands
-More aware of what materials give best overall cost and quality
-Better relationships developed with suppliers
Cons
-Different sites/divisions may be buying same product at different price.
-Multiple supplier contacts and more orders and payables overall for organization to
handle
-No complete information about total spend across enterprise.
The Purchasing Process (6 steps) - Answers - 1. Forecast and plan requirement
2. Need clarification/requisition
3. Supplier identification/selection
4. Approval/Contract/P.O generation
5. Receive material & documents
6. Settle, pay, and measure performance
Three documents used for supplier identification: - Answers - -RFI (request for info): find
out what is possible; very general.
-RFP (request for proposal): send blueprint to supplier, request for any improvements of
product
