Purchasing and supply chain management

Cover
Brief Contents
Contents
List of memos
Acknowledgements
Preface
Introduction
List of abbreviations
SECTION I: Core concepts
	1 The role of purchasing in the value chain
		Learning objectives
		Introduction
		Case study: Purchasing and supply chain management at Damen Shipyards
		The role of purchasing in the value chain
		Definition of concepts
		Importance of purchasing to business
		Classification of purchased goods
		Challenges and changes in the procurement context
		Summary
		Assignments
		References
	2 Industrial buying behaviour: ­decision-making in purchasing
		Learning objectives
		Introduction
		Case study: Buying computer systems in a car leasing company
		Organizational buying behaviour: basic characteristics
		Models of industrial buying behaviour
			Variables that affect the buying process
		Purchasing process management
			The linear purchase process model
			The extended purchasing model
		Role of the buyer
		The specification phase
		Supplier selection and supplier assessment
		Negotiation and contracting
			Prices and terms of delivery
			Terms of payment
			Penalty clauses and warranty conditions
			Other arrangements
		The ordering process and expediting
		Follow-up and evaluation of the buying process
		E-procurement
		Major bottlenecks and problems
		Summary
		Assignments
		References
	3 The purchasing management process
		Learning objectives
		Introduction
		Case study: Shell Houston
		Primary tasks and responsibilities
		Professionalizing purchasing: a few principles
			Business alignment
			Integrated, cross-functional approach
			Performance-driven
		Purchasing management process
			Purchasing and supply (market) research
			Purchasing and supply objectives, strategy and planning
			Implementation of purchasing policy
			Control and evaluation
		How purchasing and supply management develops over time
			Stage 1 Transaction orientation: serve the factory
			Stage 2 Commercial orientation: lowest unit price
			Stage 3 Co-ordinated purchasing
			Stage 4 Internal integration: cross-functional purchasing
			Stage 5 External integration: supply chain management
			Stage 6 Value chain orientation
		Some observations from practice
		Summary
		Assignments
	4 Buying business services
		Learning objectives
		Introduction
		Case study: Buying marketing services at a European telecom provider
		The increasing importance of services
		Differences between goods and services
		Towards a classification of services
		The pre-contractual stage
			Specifying: defining the scope of work for service providers
			Selecting service providers
			Contracting for services
		The post-contractual stage
		Involvement of purchasing in contracting for services
		Summary
		Assignments
		References
	5 Contract management for complex projects
		Learning objectives
		Introduction
		Case study: What happened at the Amsterdam metro project
		Contract management and contracts: agency theory
		The contracting process
			Pre-contractual stage
			Contractual stage
			Contract execution
			Post-contractual stage
		Problems in contract management
		Perspectives on contract management
		Contract models
		Contract building blocks: pricing and payment mechanisms in contracts
			Pricing mechanisms
			Payment terms
			Penalty clauses, liquidated damages and warranty conditions
		Subcontracting and project execution
		Contract governance
		Summary
		Assignments
		References
	6 Public procurement
		Learning objectives
		Introduction
		Case study: What is good procurement?
		The nature of public procurement
		Public procurement law
		Scope of the European Directives on public procurement
			Scope
			Framework agreements
			Excluded assignments
			Threshold values
		Notices and public procurement procedures
			Notice
			European procurement procedures
			Open procedure
			Restricted procedure
			Competitive procedure with negotiation
			Negotiated procedure without prior publication
			Competitive dialogue
			Innovation partnership
			Design contest
			Dynamic purchasing system
		Procurement process
			Defining specifications
			Supplier selection
			Soliciting bids and awarding contracts
		Implications for public procurement
		Summary
		Assignments
		Integrative case 6.1: Procurement of multi-functionals in the Blue Lake Hospital
		Appendix 1
		Appendix 2
		Integrative case 6.2: Technix
		Appendix 1
		Appendix 2
		Appendix 3
		Integrative case 6.3: Fred’s Fresh Supermarket
SECTION II: Strategy and planning
	7 Purchasing and business strategy
		Learning objectives
		Introduction
		Case study: Harnessing the power of the network to deliver results
		The strategic role of purchasing
		Is purchasing strategic … or not?
		Purchasing’s role in strategic management theory
			Strategic planning and marketing theories
			Competitive strategy
			Innovation strategy and competence management
			From internal to external resource management
			Strategic management thinking: implications for purchasing and supply management
		Towards purchasing excellence
			Strategic management processes
			Enabling processes
		Purchasing portfolio analysis: principles
			Four basic supplier strategies
		Global sourcing
		Summary
		Assignments
		References
	8 Outsourcing and risk management
		Learning objectives
		Introduction
		Case study: Outsourcing of IT
		Outsourcing as a business concept
		Definitions and concepts
		Rationales for outsourcing
			Success of outsourcing as a business strategy
		The outsourcing process
			Strategic phase
			The transition phase
			The operational phase
		Risk assessment
		Critical success factors of outsourcing
		Summary
		Assignments
		References
	9 Category sourcing: developing effective sourcing strategies
		Learning objectives
		Introduction
		Case study: HP shows how to outsource production while keeping control over suppliers
		Reasons underlying cost-savings potential in purchasing
		How to identify cost-savings potential
		Developing a sourcing strategy
		Category sourcing planning
		Getting better results from suppliers
		The myth of partnership
		Summary
		Assignments
		References
	10 Purchasing, innovation and quality management
		Learning objectives
		Introduction
		Case study: Suppliers as a source of innovation: PSA’s Pluriel project
		Purchasing and innovation
		The role of suppliers in new product development: early supplier involvement
		Purchasing and new product development
		Purchasing and quality management
			Definition of terms: quality and quality assurance
		The costs of quality
		Supplier quality assurance
		Assessing supplier quality: diagnostic methods
		Implementing SQA: consequences for purchasing
		Summary
		Assignments
		References
	11 Purchasing, logistics and supply chain management
		Learning objectives
		Introduction
		Purchasing, logistics and supply chain management: definitions and concepts
		Case study: Li & Fung
		Materials requirements planning
		Basic logistics structures
		Just-in-time management
			Characteristics of just-in-time management
			Order quantities and batch sizes
			Quality and zero defects
			JIT and the purchasing function
			Advantages and disadvantages for the supplier
			JIT and supplier selection
		Elements of the purchasing information system
		Co-ordination problems between purchasing and logistics
		Summary
		Assignments
		Reference
	12 Purchasing organization
		Learning objectives
		Introduction
		Case study: Building blocks of change
		Purchasing organization structure
		Factors influencing the location of purchasing in the organization
		Levels of tasks, responsibilities and authority
			Strategic level
			Tactical level
			Operational level
		Organizational structures within purchasing
			Structure of purchasing in multi-unit companies
			Decentralized purchasing structure
			Centralized purchasing structure
			Hybrid structure
			Line/staff organization
			Category sourcing structure
			Centralized versus decentralized purchasing: some criteria to consider
			Purchasing organization in single-unit companies
		Purchasing job profiles
		Summary
		Assignments
		References
	13 Performance measurement and governance in purchasing
		Learning objectives
		Introduction
		Case study: The introduction of a quality programme by an industrial components manufacturer
		Factors influencing purchasing performance measurement
		Why measure purchasing performance?
		How to assess purchasing performance
		Measuring purchasing performance: five key areas
			Purchasing price/cost dimension
			Purchasing product/quality dimension
			Purchasing logistics dimension
			Supplier relationship dimension
			Purchasing’s organizational dimension
		Purchasing budgets, purchasing savings and other performance measures
			Purchasing materials budget
			Purchasing budget indirect materials
			The investment and tooling budget
			Purchasing departmental budget
			Purchasing cost savings: definitions and measures
			Ratios and key performance indicators
		Sarbanes–Oxley and procurement governance
		Purchasing audit as a management tool
		Summary
		Assignments
		Integrative case 13.1: International Foods Industries
		Appendix 1
		Appendix 2
		Integrative case 13.2: European Airlines
		Integrative case 13.3: Serving the customer at Joycies Products Ltd
SECTION III: Special topics
	14 Supplier management: cost approaches and techniques
		Learning objectives
		Introduction
		Case study: Building a new headquarters
		How is the purchase price determined?
		Pricing methods
		The learning curve
		Supplier assessment
			Levels of assessment
			Supplier assessment methods
			Financial assessment
		Supplier development
		Summary
		Assignments
		References
	15 Purchasing, corporate social responsibility and integrity
		Learning objectives
		Introduction
		Case study: Mattel’s reputation at stake through sourcing in China
		Business principles and procurement
		Towards a sustainable environment: ‘people, planet, profit’
		From the Resource-Based View to stakeholder theory
		Sustainable purchasing: towards sustainable supply chains
		How to drive CSR in supply chain relationships
		Circular sourcing
		Trust, business integrity and ethics
		Summary
		Assignments
		References
		Integrative case 15.1: Legends Car Company
		Integrative case 15.2: Nespresso
Glossary
Index