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What are some examples of Operational Activities?
- Placing Purchase Orders
- Transactionally focused activities
- Managing Supplier relationships
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What are some examples of Strategic Activities?
- Supplier development responsibilities
- Coordinating the procurement system
- Managing Risk in the supply chain
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What are some benefits of having a Centralized Authority?
- Leveraging of volume purchases
- Transportation savings
- Reduction in cost of services
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What are some benefits of Decentralization?
- Faster response time for multiple locations
- Better understanding of location requirements
- Specialty Buyers can evolve
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What does ROI stand for?
Resource, Optimization, & Innovation
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What are the 3 types of Supplier/Buyer Relationships?
- Transactional
- Collaborative
- Alliance
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What are some characteristics of Transactional Relationships?
- Absence of concern
- Cost, data, & forecasts are not shared
- Price is the focus
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What are some advantages to Transactional Relationships?
- Less purchasing time and effort is required
- Lower skill levels are required
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What are some Disadvantages of Transactional Relationships?
- Inflexible when flexibility is required
- Potential for communication difficulties
- Suppliers provide minimum service
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What are some characteristics of Collaborative Relationships?
- Longer term contracts
- Reduce total costs
- Increased investment in R&D and Training
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What are some benefits of Supply Alliances?
- Lower total cost
- Improved quality
- Improved continuity of supply
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What are some situations where an Alliance may not be appropriate?
- Non competitive market
- No hard savings from partnership
- No internal customer buy in
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What are the 7-steps of Strategic Sourcing?
- 1. Analyze Spend
- 2. Profile Category
- 3. Develop Strategy
- 4. Develop RFQ & Negotiate OR Manage Demand
- 5. Contract with Supplier
- 6. Manage suppliers
- 7. Improve suppliers
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What stages are in the "Discovery" section of Strategic Sourcing?
Analyze Spend & Profile Category
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What stage is in the "Evaluation" section of Strategic Sourcing?
Develop Strategy
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What stages are in the "Selection" section of Strategic Sourcing?
- Develop eRFQ & Negotiate OR Manage Demand
- &
- Contract with Suppliers
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What stages are in the "Development & Manage" section of Strategic Sourcing?
Manage Suppliers & Improve Suppliers
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What happens in a Reverse Auction?
- Real time interaction between company and supplier.
- Effective for achieving cost savings
- Can have negative effects on Long-Term relationships
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What is RFP stand for?
Request for Proposal
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What does ESI stand for?
Early Supplier Involvement
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Explain the 70/30 approach
- 70% of volume is awarded to one supplier
- 30% of volume is awarded to the other supplier
- Economies of scale are obtained from big supplier
- Competition is obtained from little supplier
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What are some advantages of single sourcing?
- Lower total cost
- Buyer has more influence
- Improved commitment from supplier
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What are some advantages of Multiple Sourcing?
- Maintains competition
- Provides a back up source
- Easier to reach volume requirements
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What were 3 elements of change from the WSU Procurement presentation?
- Department Organization
- eProcurement
- Sourcing Strategies
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WSU Procurement Presentation: What changed in their Strategic Sourcing?
Transition from a transactional approach to a strategic analysis of commodity
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WSU Procurement Presentation: What changed in their eCommerce?
The industry that
responded quicker would be perceived to have better customer service
- Improved negotiated vendor pricing
- Easy to use marketplace to access prices
- Focused on spend analysis & campus needs
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What are the categories in the 2x2 Matrix? (From Left to Right)
- Leverage, Strategic
- Routine, Bottleneck
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2x2 Matrix: Leverage
- High expenditure area
- Goods & services are readily available
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2x2 Matrix: Strategic
- Few qualified supply sources
- Complex specifications (critical design to quality)
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2x2 Matrix: Boottleneck
- Very complex specifications
- Few alternate products
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