Procurement - answer-Involves obtaining something either tangible (goods) or intangible (services). The process begins by identifying a need and is complete once that need is delivered. It is a strategic function.
tangible - answer-capable of being touched; real, concrete
intangible - answer-...
CIPs L4M1 LO1
Procurement - answer-Involves obtaining something either tangible (goods) or intangible (services). The
process begins by identifying a need and is complete once that need is delivered. It is a strategic
function.
tangible - answer-capable of being touched; real, concrete
intangible - answer-unable to be touched or grasped; not having physical presence
Strategic - answer-High level planning including setting direction and long term goals.
A typical Supply Chain - answer-Primary - raw materials
Secondary - manufacturing
Tertiary - services
Each sector adds value.
Supply Chain Definition - answer-The infrastructure involved in physically getting the products and
services delivered.
A channel of goods distribution.
Starts with raw material supplier.
Moves through a operational process to the distributor and retailer.
And finally to the customer.
Upstream Supply Chain - answer-Supply of raw materials, components, parts etc that are needed for
production.
downstream supply chain - answer-the supply chain from the production facility to the end-customer
Supply Chain Management - answer-a management system that coordinates and integrates all of the
activities performed by supply chain members into a seamless process, from the source to the point of
consumption, resulting in enhanced customer and economic value
Ethics definition - answer-Principles governing the behavior of an individual or a group. These principles
establish appropriate behavior indicating what is right and wrong.
Supply Chain Network - answer-Evolution of basic supply chain to include all other parties involved in
the entire supply process rather than just one element. A two-way exchange of information. A one-way
flow of goods.
Physical flows - answer-The movement and storage of goods and materials within a supply chain. These
are the tangible parts of supply chain network. Goods flow one way only.
Informational flows - answer-Organisational strategies and the way they are communicated, the control
processes within the network and the standards to which the chain should work. Information flows two
ways.
Difference between supply chain and supply chain networks - answer-Scope: Supply Chain System:
Focuses on the processes, activities, and functions that make up the operational and tactical aspects of
the supply chain. It deals with the day-to-day execution of tasks. Supply Chain Network: Focuses on the
structural and strategic aspects of the supply chain, including the design and configuration of the supply
chain's physical and logistical components.
Timeframe: Supply Chain System: Concerned with immediate and short-term tasks related to the flow of
goods and information.Supply Chain Network: Addresses longer-term planning and strategic decisions
regarding the setup of the supply chain.
Decision-Making Level: Supply Chain System: Involves decisions made at the operational and tactical
levels by supply chain managers and practitioners.
Supply Chain Network: Involves decisions made at the strategic level by top management, such as
network design, location planning, and partnership strategies.
What is added value? - answer-Non-cash releasing benefits generated via procurement processes and
supplier relationship management. Also defined as product and service mix features which the customer
values and is therefore prepared to pay extra for.
What is cost? - answer-The amount of money used to make a product or deliver a service
What is inventory? - answer-Components, raw materials, work in progress, finished goods and supplies
required for the creation of goods and services for the customer. It can also refer to the number of units
and/or value of the stock of goods held by a company
What is logistics? - answer-The movement of something from one place to another
What is purchasing? - answer-The buying of goods and services for a business.
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