Summary
Summary Logistics Management 244 Notes
- Course
- Institution
- Book
Comprehensive summary of Logistics 244. Includes: Chapters 5, 6, 10, 11, 12 and VCFM calculations.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Managing Supply Chains A Logistics Approach International Edition 9th Edition by Coyle - Test Bank
-
Test bank for supply chain management a logistics perspective 10th edition john j coyle c john langl by patsy
-
Test Bank For Supply Chain Management A Logistics Perspective 11th Edition By John
Seller
Follow
Dopenotes2
Reviews received
Content preview
LOGISTICS MANAGEMENT 244SUMMARIES
CHAPTER 5
SOURCING MATERIALS AND SERVICES
,Introduction
Logistics and supply chain managers are looking for ways to drive more value
from their purchasing and procurement operations
As a result, the topics below are all receiving considerable attention as
organisations try to improve the overall efficiency and effectiveness of their
supply chains
o Purchasing
The transactional function of buying products and services
o Procurement
Refers to the process of managing a broad range of processes
that are associated with a company’s need to procure goods
and services that are required to manufacture a product or to
operate the organisation
o Strategic sourcing
This is broader and more comprehensive than the procurement
process
Focuses more on supply chain impacts of procurement and
purchasing decisions, and works cross-functionally within the
business to help achieve the organisation’s overall business
goals
It is NB to consider purchasing as an activity, while procurement and strategic
sourcing are best described as processes
Unique aspects of strategic sourcing:
,Types and Importance of Items and
Service Purchased
Some products are more NB and require greater procurement attention than
others
The quadrant technique enables the supply chain manager to assess the
importance of each product or service being purchased
o This technique utilises a two-by-two matrix to determine a procured
item’s relative importance on the basis of value and risk
o The criteria used to delineate importance are value or profit potential
and risk or uniqueness
The value criterion examines product or service features that enhance profits
for the final product and the firm’s ability to maintain a competitive advantage
in the market place
Risk reflects the chance of failure, non-acceptance in the marketplace,
delivery failures, and source non-availability
Generics
o Are low-risk, low-value items and services that typically don’t enter the
final product
o The admin and acquisition processing costs are more significant than
the purchase price of generics
o The strategic procurement thrust for generics is to streamline the
procurement process to reduce the cost associated with purchasing
generics
, Commodities
o Are items or services that are low in risk but high in value
o Basic production materials, basic packaging and transportation
services are examples of commodities that enhance the profitability of
the company but pose a low risk
o Risk is low because commodities are not unique items, and there are
many sources of supply
o Because commodities are not unique, there is little brand distinction,
and price is a significant distinguishing factor
o The procurement strategies used for commodities include volume
purchasing to reduce price and JIT systems to lower inventory
Distinctives
o High-risk, low-value items and services such as engineered items,
parts that are available from only a limited number of suppliers, or
items that have a long lead time
o A stockout of distinctives results in stopping the production line or
changing the production schedule to work around a stocked-out item
o The strategic focus for distinctives is developing a standardisation
program to eliminate or reduce the uniqueness of the distinctives,
thereby changing these items to generics
Criticals
o High-risk, high-value items that give the final product a competitive
advantage in the marketplace
o Criticals determine the customer’s ultimate cost of using the finished
product
o The procurement strategy for criticals is to strengthen their value
through the use of new technologies, simplification, close supplier
relations, and/or value-added alterations
Three types of buy situations may occur
o That of capital goods that may represent a longer-term investment for
an organisation that may require financial planning
o Re-buys, which are repeat purchases that may either be identical to
historical purchases or some variation thereof
o That of maintenance, repair, and operations items that are needed for
the continuing operation of the company and its supply chain activities
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Dopenotes2. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.63. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53022 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now