Podcast
Questions and Answers
What should be detailed in the sustainability and compliance section?
What should be detailed in the sustainability and compliance section?
- Marketing strategies and outreach efforts
- Project timelines and budgets
- Financial performance metrics
- Sustainability initiatives and compliance with industry regulations (correct)
What is the primary focus of a collaboration proposal as described?
What is the primary focus of a collaboration proposal as described?
- Budget allocations and funding sources
- Timeline for project completion
- Scope of materials and value-added services (correct)
- Customer satisfaction metrics
What type of insurance coverage should be provided under Insurance and Risk Management?
What type of insurance coverage should be provided under Insurance and Risk Management?
- Liability and product liability insurance (correct)
- Property insurance
- Health and safety insurance
- Automobile insurance
What is meant by Total Cost of Ownership?
What is meant by Total Cost of Ownership?
What is emphasized about the response deadline in the RFI process?
What is emphasized about the response deadline in the RFI process?
What is the role of the Procurement and Supply Chain Program Manager?
What is the role of the Procurement and Supply Chain Program Manager?
Why is it important to provide additional relevant information or documentation in the RFI?
Why is it important to provide additional relevant information or documentation in the RFI?
Which aspect should NOT be included when confirming compliance?
Which aspect should NOT be included when confirming compliance?
Which of the following criteria is NOT included in the financial data area when searching for suppliers?
Which of the following criteria is NOT included in the financial data area when searching for suppliers?
What does ISO 9001 relate to in supplier evaluation?
What does ISO 9001 relate to in supplier evaluation?
Which criterion is associated with a supplier's production capacity?
Which criterion is associated with a supplier's production capacity?
In the context of RFI, which area focuses on dedicated resources for innovation?
In the context of RFI, which area focuses on dedicated resources for innovation?
What is meant by 'Eco-Design' in relation to CSR & Sustainability criteria?
What is meant by 'Eco-Design' in relation to CSR & Sustainability criteria?
Which of the following is NOT an example of a criterion assessed in human resources?
Which of the following is NOT an example of a criterion assessed in human resources?
Which is a criterion that relates to delivery and logistics in the supply chain?
Which is a criterion that relates to delivery and logistics in the supply chain?
What does CSR stand for in procurement contexts?
What does CSR stand for in procurement contexts?
Which of the following IS a criterion for assessing a supplier's innovation capabilities?
Which of the following IS a criterion for assessing a supplier's innovation capabilities?
What is the primary purpose of conducting an internal upstream analysis in the procurement process?
What is the primary purpose of conducting an internal upstream analysis in the procurement process?
What is the primary purpose of developing a tendering document in the procurement process?
What is the primary purpose of developing a tendering document in the procurement process?
Which analysis method is used to understand total costs associated with procurement?
Which analysis method is used to understand total costs associated with procurement?
What does the central part of the procurement process primarily involve?
What does the central part of the procurement process primarily involve?
Which aspect is NOT typically included in the requirements specification for purchasing laptops?
Which aspect is NOT typically included in the requirements specification for purchasing laptops?
In the context of a call for bids, which of the following is usually NOT essential information to include?
In the context of a call for bids, which of the following is usually NOT essential information to include?
What is the final phase in the procurement process focused on?
What is the final phase in the procurement process focused on?
What is the purpose of market analysis in the procurement process?
What is the purpose of market analysis in the procurement process?
What type of criteria might be included in the special elements of a tendering document?
What type of criteria might be included in the special elements of a tendering document?
Which component is essential in a contract progress report for an IT project?
Which component is essential in a contract progress report for an IT project?
Which of the following does not occur during the central part of the procurement process?
Which of the following does not occur during the central part of the procurement process?
What is the benefit of using ABC analysis in procurement?
What is the benefit of using ABC analysis in procurement?
Which factor represents a strength when considering expansion into a new market?
Which factor represents a strength when considering expansion into a new market?
What is the main objective of identifying implementation actions for improvement in a contract progress report?
What is the main objective of identifying implementation actions for improvement in a contract progress report?
What is a primary weakness related to the company's procurement operations?
What is a primary weakness related to the company's procurement operations?
Which step directly follows the award phase in the procurement process?
Which step directly follows the award phase in the procurement process?
When drafting context for a procurement project, which of the following should be prioritized?
When drafting context for a procurement project, which of the following should be prioritized?
Which opportunity exists in the new market being considered for expansion?
Which opportunity exists in the new market being considered for expansion?
In supplier relationship management, what is a crucial aspect to be monitored?
In supplier relationship management, what is a crucial aspect to be monitored?
What is the primary focus of the procurement strategy established through analysis?
What is the primary focus of the procurement strategy established through analysis?
In the Kraljic Matrix, which quadrant would Supplier E (unique patented technology) likely fall into?
In the Kraljic Matrix, which quadrant would Supplier E (unique patented technology) likely fall into?
How can procurement performance be evaluated effectively?
How can procurement performance be evaluated effectively?
Which supplier is classified as a non-essential supplier in the Kraljic Matrix?
Which supplier is classified as a non-essential supplier in the Kraljic Matrix?
What external factor poses a potential threat to the company's expansion plans?
What external factor poses a potential threat to the company's expansion plans?
Which supplier provides components with high supply risk and high impact on business objectives?
Which supplier provides components with high supply risk and high impact on business objectives?
Which of the following best describes the competitive landscape of the new market?
Which of the following best describes the competitive landscape of the new market?
What was the main focus of procurement in the year 1945?
What was the main focus of procurement in the year 1945?
By what percentage did procurement contribute to turnover in 1990?
By what percentage did procurement contribute to turnover in 1990?
Which mission is associated with procurement's role in risk management?
Which mission is associated with procurement's role in risk management?
What distinguishes the procurement process from the purchasing process?
What distinguishes the procurement process from the purchasing process?
In what phase did procurement shift its focus to sustainability?
In what phase did procurement shift its focus to sustainability?
Which activity is NOT part of the procurement function's missions?
Which activity is NOT part of the procurement function's missions?
How does procurement contribute to economic performance?
How does procurement contribute to economic performance?
What does the procurement process include after identifying needs?
What does the procurement process include after identifying needs?
What is a primary role of procurement in relation to suppliers?
What is a primary role of procurement in relation to suppliers?
Which statement about procurement's role in innovation is true?
Which statement about procurement's role in innovation is true?
Which of the following is a key distinction between procurement and purchasing?
Which of the following is a key distinction between procurement and purchasing?
What is one of the significant risks procurement must manage?
What is one of the significant risks procurement must manage?
Which activity is NOT typically conducted by the procurement function?
Which activity is NOT typically conducted by the procurement function?
What should procurement focus on when developing a procurement policy?
What should procurement focus on when developing a procurement policy?
Flashcards
Procurement vs. Purchasing
Procurement vs. Purchasing
Procurement is a broader process encompassing all stages of sourcing, selection and management of supplies, while purchasing is a narrower part focusing on the order process.
Procurement Functions
Procurement Functions
Procurement's role is to plan, buy, and manage products and services from suppliers, maintaining relationships and optimizing costs.
Historical Procurement
Historical Procurement
Procurement's role evolved over time from a 20% of company turnover function (1945) to playing a 60% role (1990) driven by globalization and cost efficiency.
Procurement Process Stages
Procurement Process Stages
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Procurement Policy
Procurement Policy
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TCO Reduction
TCO Reduction
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Supplier Management
Supplier Management
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Need Identification
Need Identification
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Supplier Risks
Supplier Risks
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Process of Purchase
Process of Purchase
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Work Capital Requirement
Work Capital Requirement
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Purchase Request (PR)
Purchase Request (PR)
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Sustainability Procurement
Sustainability Procurement
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Globalisation impact
Globalisation impact
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Procurement Process: Internal Analysis
Procurement Process: Internal Analysis
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Procurement Portfolio Analysis
Procurement Portfolio Analysis
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Market Analysis (in Procurement)
Market Analysis (in Procurement)
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Cost Analysis in Procurement
Cost Analysis in Procurement
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Procurement Strategy
Procurement Strategy
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Sourcing and Supplier Evaluation
Sourcing and Supplier Evaluation
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Supplier Consultation
Supplier Consultation
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Supplier Negotiation
Supplier Negotiation
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Contractualization
Contractualization
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Performance Management in Procurement
Performance Management in Procurement
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RFI (Request for Information)
RFI (Request for Information)
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Social Responsibility in RFI
Social Responsibility in RFI
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Financial Data in RFI
Financial Data in RFI
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Production Capacity in RFI
Production Capacity in RFI
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Human Resources in RFI
Human Resources in RFI
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Experience in RFI
Experience in RFI
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Quality and Supply Chain in RFI
Quality and Supply Chain in RFI
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Innovation in RFI
Innovation in RFI
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CSR & Sustainability in RFI
CSR & Sustainability in RFI
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Collaborating with a Supplier
Collaborating with a Supplier
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Total Cost of Ownership (TCO)
Total Cost of Ownership (TCO)
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Upstream Procurement Costs
Upstream Procurement Costs
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Acquisition Costs
Acquisition Costs
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Sustainability Initiatives
Sustainability Initiatives
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Industry Regulations and Standards
Industry Regulations and Standards
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Collaboration Proposal
Collaboration Proposal
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Insurance Coverage
Insurance Coverage
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Risk Management Practices
Risk Management Practices
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SWOT Analysis
SWOT Analysis
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Kraljic Matrix
Kraljic Matrix
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Strategic Procurement
Strategic Procurement
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Non-critical Procurement
Non-critical Procurement
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Leverage Procurement
Leverage Procurement
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Bottleneck Procurement
Bottleneck Procurement
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Supplier A
Supplier A
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Supplier B
Supplier B
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Tendering Document
Tendering Document
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Letter: Invitation to Tender
Letter: Invitation to Tender
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Functional Requirements
Functional Requirements
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Technical Requirements
Technical Requirements
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Evaluation Criteria
Evaluation Criteria
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Contract Progress Report
Contract Progress Report
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Improvement Actions
Improvement Actions
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Special Elements in Procurement
Special Elements in Procurement
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Study Notes
Course Information
- Course title: Purchasing and Procurement Management
- Instructor: Amr MIR
- Amr MIR is a Procurement and Supply Chain Program Manager with a PhD in Supply Chain Management.
Historical Basis of Procurement
- 1945: Production Economy. Procurement was 20% of turnover.
- 1974: Market Economy. Procurement was 50% of turnover.
- 1990: Globalization. Procurement was 60% of turnover.
- 2000: Regionalization. Sustainability is triple economic, social, and environmental performance. Companies now focus on agility and resilience alongside costs and margins.
Purchasing vs. Procurement
- Purchasing: Focuses on the transactional activities of buying goods and services. Activities such as calculating need, processing purchase requests, managing inventory, and tracking supplier payments.
- Procurement: Focuses on strategic sourcing and supplier relationship management. Activities such as developing procurement policies, analyzing supplier markets, qualifying suppliers, negotiating contracts, and driving performance improvement.
Procurement Process
- Source-to-contract: Starts with identifying needs and ends with contract negotiations.
- Purchase-to-pay: Focuses on the process of ordering, receiving, and paying for goods and services.
Main Missions of Procurement
- TCO Reduction: Optimizing working capital requirements.
- Contribute to economic performance: Driving cost-effectiveness and efficiency.
- Contribute to the creation of value: Fostering innovation, social responsibility, and environmental practices in procurement.
- Manage risks: Including supply chain disruption, supplier failure, and environmental and social risks.
- Other Missions: Defining everyone's role, maintaining contact with suppliers and internal stakeholders, promoting culture innovation, and supporting other company teams.
Procurement Process - Internal Analysis
- Internal upstream analysis phases: analyzes existing portfolio and needs to be served, supplemented by external market analysis and supplier analysis. Cost analysis, market analysis and financial analysis provide necessary support to select right supplier.
- Procurement Process: Central part of the process that needs rigor and professionalism will lead to better supplier selection. Performance management of suppliers and other actors of procurement is important.
- Purchasing Classifications: Defining unique codes to structure purchases in consistent families and sub-families. This creates an organized structure for ERP.
Purchasing Classification - Implementation
- Collect all items via information systems, group into macro groups (production, non-production, investment).
- Group into families and sub-families respecting a logical structure,
- Create an appropriate coding system for groups, families, and sub-families.
Purchasing Classification - Goals
- Develop a strategy by purchasing family
- Define the scope of purchasing intervention
- Define the skills profiles of buyers according to the purchasing segment
- Build the supplier panel by selecting the best performers by purchasing family
Spend Analysis by Family
- Expenditure analysis collects information on purchases by family (the number of references, the number of items, the number of invoices, and the number of suppliers).
- Analysis helps to create a detailed organizational structure for ERP and to identify key information.
Procurement Process - External Analysis
- Supplier Market Analysis: Differentiates five types of supplier markets based on competition intensity: competitive, monopoly, oligopolistic, captive, and viscous markets.
- Porter's Competitive Forces Analysis: Identifies the six competitive forces that impact the market to create a SWOT analysis to determine the feasibility and potential risks of expansion.
Request for Information (RFI)
- RFI is a tool used to preselect suppliers based on objective criteria.
- It can be a file, questionnaire, or online form.
- Criteria for RFI include supplier assessment, product/service evaluation, general conditions compliance. The information gathered enables technical and feasibility analysis of the project.
Search for Suppliers: RFI Criteria
- The criteria for searching for suppliers by RFI includes company structure, financial data, commercial activity, production capacity and technology.
- The criteria are based on human resources, experience, quality and supply chain aspects, innovation and CSR & sustainability.
Collaboration Request – Request for Information (RFI)
- Process for procurement officers to gather detailed information from potential suppliers in a formal RFI request.
- Includes detailed sections covering company overview, financial stability, product catalog, quality assurance, supply chain and logistics, references, sustainability and compliance, collaboration proposal, and insurance and risk management.
Procurement Process: Cost Analysis
- Total Cost of Ownership (TCO): The full cost of a good/service includes acquisition, upstream procurement, implementation costs, usage costs, and destruction/recycling costs.
- Price Decomposition: Breaks down costs into purchasing, added value, specific costs, overheads, and logistics categories, and associated cost drivers.
Procurement Strategy
- Companies are seeking to expand their operations into new markets.
- A SWOT analysis needs to be conducted to evaluate feasibility and risks.
- The procurement processes must be examined for efficiency.
- Competition, industry changes, and political/economic factors are important elements of strategy.
- Analysis of critical, bottleneck, leverage, and non-critical suppliers helps to identify risks and optimize relationships.
Supplier Relationship Management
- Contract Progress Report: Documents quality of deliverables, resources implemented, overall progress, mission management, and responsiveness.
- Implementation Actions: Identifies specific actions needed to improve the contract's performance in each criteria.
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