Purchasing and Supply Chain Management

Brief Contents......Page 6
Contents......Page 8
Preface......Page 24
Acknowledgments......Page 31
About the Authors......Page 32
Part 1: Introduction......Page 33
Ch 1: Introduction to Purchasing and Supply Chain Management......Page 35
Introduction......Page 38
A New Competitive Environment......Page 39
Why Purchasing is Important......Page 40
Understanding the Language of Purchasing and Supply Chain Management......Page 43
Achieving Purchasing and Supply Chain Benefits......Page 49
The Supply Chain Umbrella-Management Activities......Page 50
Four Enablers of Purchasing and Supply Chain Management......Page 52
The Evolution of Purchasing and Supply Chain Management......Page 56
Looking Ahead......Page 60
Part 2: Purchasing Operations and Structure......Page 69
Ch 2: The Purchasing Process......Page 71
Introduction......Page 73
Purchasing Objectives......Page 74
Strategic Supply Management Roles and Responsibilities......Page 77
Improving the Procure-to-Pay Process......Page 83
Approval, Contract, and Purchase Order Preparation......Page 97
Types of Purchases......Page 105
Ch 3: Purchasing Policy and Procedures......Page 118
Policy Overview......Page 120
Purchasing Policies-Providing Guidance and Direction......Page 122
Purchasing Procedures......Page 140
Ch 4: Supply Management Integration for Competitive Advantage......Page 146
Introduction......Page 149
Integration: What is It?......Page 151
Internal Integration......Page 152
External Integration......Page 157
The Critical Role of Cross-Functional Sourcing Teams......Page 164
Integrating Supply Management, Engineering, and Suppliers to Develop New Products and Services......Page 173
Potential Benefits of On-Site Supplier Representatives......Page 182
Ch 5: Purchasing and Supply Management Organization......Page 189
Introduction......Page 192
P/SM Organizational Structure......Page 193
Location of Authority Centralized or Decentralized......Page 194
Purchasing's Position within the Organizational Structure......Page 203
Scope of the Purchasing/Supply Management Job Function......Page 206
Purchasing/Supply Management Job Tasks......Page 207
Using Teams as Part of the Organizational Structure......Page 209
Future Trends in Organizational Design......Page 212
Part 3: Strategic Sourcing......Page 221
Ch 6: Category Strategy Development......Page 223
Introduction......Page 225
Aligning Supply Management and Enterprise Objectives......Page 226
What is a Category Strategy?......Page 231
Category Strategy Development......Page 240
Types of Supply Management Strategies......Page 262
E-Reverse Auctions......Page 268
Ch 7: Supplier Evaluation and Selection......Page 277
Introduction......Page 279
The Supplier Evaluation and Selection Process......Page 280
Identify Potential Supply Sources......Page 281
Use of Preferred Certified and Partnered Suppliers......Page 295
Key Supplier Evaluation Criteria......Page 296
Employee Capabilities......Page 297
Process and Technological Capability......Page 298
Sustainability and Environmental Compliance......Page 299
Scheduling and Control Systems......Page 301
E-Commerce Capability......Page 302
Longer-Term Relationship Potential......Page 303
Step 1: Identify Supplier Evaluation Categories......Page 304
Step 3: Identify and Weigh Subcategories......Page 305
Step 5: Evaluate Supplier Directly......Page 306
Step 6: Review Evaluation Results and Make Selection Decision......Page 308
Step 7: Review and Improve Supplier Performance Continuously......Page 309
Reducing Supplier Evaluation and Selection Cycle Time......Page 310
Ch 8: Supplier Quality Management......Page 317
Overview of Supplier Quality Management......Page 319
Factors Affecting Supply Management's Role in Managing Supplier Quality......Page 322
Supplier Quality Management Using a Total Quality Management Perspective......Page 324
Pursuing Six Sigma Supplier Quality......Page 340
Using ISO Standards and MBNQA Criteria to Assess Supplier Quality Systems......Page 341
Basic Contents of a Supplier Quality Manual......Page 347
Ch 9: Supplier Management and Development: Creating a World-Class Supply Base......Page 354
Introduction......Page 355
Supplier Performance Measurement......Page 356
Rationalization and Optimization: Creating a Manageable Supply Base......Page 364
Supplier Development: A Strategy for Improvement......Page 371
Overcoming the Barriers to Supplier Development......Page 375
Managing Supply Base Risk......Page 381
Managing Sustainability in the Supply Base......Page 389
Ch 10: Worldwide Sourcing......Page 396
Globalization-Changing Supply Strategy in a Dynamic World Economy......Page 398
Changing Global Dynamics Create Challenges......Page 399
Worldwide Sourcing Timeline......Page 401
Developing a Worldwide Sourcing Program......Page 409
Moving to a Global Sourcing Philosophy......Page 428
Part 4: Strategic Sourcing Process......Page 439
Ch 11: Strategic Cost Management......Page 441
Introduction......Page 443
A Structured Approach to Cost Reduction......Page 444
Price Analysis......Page 450
Cost Analysis Techniques......Page 460
Building a Should-Cost Model......Page 470
Total Cost of Ownership......Page 476
Collaborative Approaches to Cost Management......Page 481
Ch 12: Purchasing and Supply Chain Analysis: Tools and Techniques......Page 491
Project Management......Page 494
Learning-Curve Analysis......Page 507
Value Analysis/Value Engineering......Page 511
Quantity Discount Analysis......Page 514
Process Mapping......Page 517
Value Stream Mapping......Page 519
Ch 13: Negotiation and Conflict Management......Page 527
What is Negotiation?......Page 529
The Negotiation Framework in Supply Management......Page 532
Negotiation Planning......Page 538
Power in Negotiation......Page 543
Concessions......Page 545
Negotiation Tactics: Trying to Reach Agreement......Page 547
Win-Win Negotiation......Page 549
International Negotiation......Page 553
Selected Countries......Page 555
The Impact of Electronic Media on Negotiations......Page 558
Ch 14: Contract Management......Page 565
Introduction......Page 567
Elements of a Contract......Page 569
How to Negotiate and Write a Contract......Page 574
Types of Contracts......Page 575
Fixed-Price Contract with Incentives......Page 577
Long-Term Contracts in Alliances and Partnerships......Page 581
Nontraditional Contracting......Page 585
Settling Contractual Disputes......Page 592
Ch 15: Purchasing Law and Ethics......Page 603
Introduction......Page 606
Legal Authority and Personal Liability of the Purchasing Manager......Page 607
Contract Law......Page 609
The Uniform Commercial Code......Page 619
Patents and Intellectual Property......Page 626
Other Laws Affecting Purchasing......Page 630
Purchasing Ethics......Page 633
Corporate Social Responsibility......Page 641
Part 5: Critical Supply Chain Elements......Page 649
Ch 16: Lean Supply Chain Management......Page 651
Introduction......Page 653
Understanding Supply Chain Inventory......Page 654
The Right Reasons for Investing in Inventory......Page 661
The Wrong Reasons for Investing in Inventory......Page 663
Creating the Lean Supply Chain......Page 667
Six Sigma......Page 669
Approaches for Managing Inventory Investment......Page 676
Delivering the Perfect Customer Order......Page 682
Ch 17: Purchasing Services......Page 689
Transportation Management......Page 691
Outsourcing Logistics to Third-Party Logistics Providers......Page 712
Purchasing Services and Indirect Items......Page 715
Sourcing Professional Services......Page 720
Ch 18: Supply Chain Information Systems and Electronic Sourcing......Page 732
Introduction......Page 735
Evolution of E-SCM Systems......Page 736
An Overview of the E-Supply Chain......Page 737
Drivers of New Supply Chain Systems and Applications......Page 743
Internal Information Systems-Enterprise Resource Planning (ERP)......Page 745
Purchasing Databases and Data Warehouses......Page 749
Electronic Data Interchange (EDI)-Pioneering External Electronic Communication......Page 751
E-Sourcing Basics......Page 753
E-Sourcing Suites-Supplier Relationship Management (SRM)......Page 754
Internal and External Systems Integration......Page 761
Information Visibility in SCM......Page 767
Collaboration and Big Data......Page 769
Ch 19: Performance Measurement and Evaluation......Page 778
Purchasing and Supply Chain Performance Measurement and Evaluation......Page 781
Purchasing and Supply Chain Performance Measurement Categories......Page 784
Developing a Performance Measurement and Evaluation System......Page 797
Performance Benchmarking: Comparing against the Best......Page 802
A Summary of Purchasing Measurement and Evaluation Characteristics......Page 807
Part 6: Future Directions......Page 813
Ch 20: Purchasing and Supply Strategy Trends......Page 815
Expanding the Mission, Goals, and Performance Expectations......Page 817
Developing Category Strategies Will Become Broader and More Complex......Page 820
Supplier Management across the Extended Supply Chain......Page 824
Designing and Operating Multiple Customer-Focused Supply Networks......Page 827
Leveraging E-System Technology Enablers Takes on Additional Focus......Page 829
Collaborating Internally and Externally Will Grow in Strategic Importance......Page 831
Attracting, Developing, and Retaining Supply Management Talent Will Become a Key Differentiator for Success......Page 833
Managing and Enabling the Future Supply Management Organization and Measurement Systems......Page 837
Twelve High-Impact Sourcing and Supply Chain Strategies for 2013-2018......Page 839
Cases......Page 845
Case 1: Avion, Inc.......Page 846
Case 2: The Global Sourcing Wire Harness Decision......Page 849
Case 3: Managing Supplier Quality: Integrated Devices......Page 851
Case 4: Negotiation-Porto......Page 854
Case 5: Purchasing Ethics......Page 855
Case 6: Insourcing/Outsourcing: The FlexCon Piston Decision......Page 858
Case 7: Email Exercise......Page 869
Index......Page 871