CIPS L4M2 Defining Business Need
Types of Purchases
new buy, straight rebuy, modified rebuy
Straight rebuy purchase
Routine purchases of the same products under approximately the same terms of sale
Modified rebuy purchase
When new-task purchases are changed on repeat orders or straight rebu...
Routine purchases of the same products under approximately the same terms of sale
Modified rebuy purchase
When new-task purchases are changed on repeat orders or straight rebuy purchases are modified
New purchase
A purchase of an item for the first time
Examples of straight rebuy purchases
Utilities (gas, water, electricity)
MRO ( Maintenance, repair and operating items)
Raw materials (steel, chemicals)
Examples of modified rebuy purchases
Services (Consulting)
Components or semifinished products
ICT
Examples of New purchases
Capital Items
Finished products
Products from resales
Task in a new purchasing
Understand the business requirement
Writing and effective communication
Researching the supply market
Researching key suppliers in that market
Deciding on the key capabilities that suppliers must have
Writing invitation to tender documentation
Managing the tender process
Negotiating
Selecting the supplier.
straight re-buy decision
A purchase decision resulting from an ongoing purchasing relationship with a supplier
,modified rebuy decision
a purchase decision that occurs when a buyer has experience in purchasing a product in the past but is
interested in acquiring additional information regarding alternative products and/or suppliers
new purchase decision
A purchase decision that made when the buyer identifies a new requirement. (New Product, technology
change, changes in the legislation to offer a new service)
Private sector Mission and Purpose
Supply the needs and improve the enduser lives maximizing the profits and provide a financial return to
its share holders.
Public sector Mission and Purpose
Provide services not available by non profit organization.
Terms of RAQSCI Model
Regulatory
Availability
Quality
Service requirement
Cost
Innovation
RAQSCI Regulatory
Covers any legal requirements or requirements of regulatory bodies
RAQSCI Abailability
Covers the continuing supply of goods and services when required and is based on factors , such as
capacity , financial stability and risk.
RAQSCI Quality
this is the consistency, repeatability and how fit for propose the procured goods and services are
RAQSCI Service requirements
are factors associated with the way services are supplied for example flexibility, support and help desk.
RAQSCI Cost
Cost and price: target cost, total cost of ownership, benchmarked prices, continues improvements.
RAQSCI Innovation
improvement customer experience
Use of RAQSCI Model
, Identified business requirements
Business requirements things to consider
Collect Information
categorize potencial stakeholders
Identify individuals who contribute to the acquisition
On completion analisys
Straight rebuy steps
List of approved suppliers
New suppliers are not considered
the process for ordering is a procurement approved and routine
Buyers experience
Why is the capability of a supplier important to a a buyer?
Provide special skills
World-class processes
Qualification from regulatory bodies (ISO)
Leading edge software
Specific capital equipment
Uniq or dominate access to rare resources (including human skills)
Reasons to prepare a business case
A contract is coming to an end and the product or service need to be procured again.
Cost reduction need to be made and this requires changes to the way that the organization operates.
An alternative product or service has been found that potentially delivers a number of benefits
business case approach
1) state problem 2) solution 3) resources
problem solving
the process of finding ways to correct situations (closed problems or unblock the blockages (open ended
problems).
Groups of problems
Closed
Open-ended
Closed problems
These appears when something happen that should not have happen.
Open-ended problems
these are where something is stopping the achievement of an objective or blocking progress
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