BADM 2160 INTRODUCTION TO PURCHASING
Supply Chain Management by
Burt, Petcavage and Pinkerton
The overall objective of this chapter is to give the reader a sense of the importance of purchasing and the supply chain and how they fit in to and impacts the business environment.
Careers in Purchasing and Supply Management
1. Does purchasing sound like a class (or career) you would be interested in? Why or why not?
2. Share with your classmates what you know about the function of purchasing.
3. Can you identify someone who might be a mentor during your early days if you decided to pursue a career in purchasing? (Note: This individual may be a great candidate for your Interview Project!)…show more content… 6. The supplier of choice – Providing the best product at the best value increases costs.
7. Customer Fulfillment flexibility – Provided supply support that allows responsiveness to customer needs
8. Shorter cycle and lead times – Improved relationships with suppliers and involvement in product and process improvement
List and define the ways supply management can contribute to lower total cost of ownership:
1. Better product design – early involvement can reduce costs
2. Acquisition Cost – Actions can be taken to reduce acquisition cost, such as specification of cost-effective materials, standardization and good sourcing and pricing practices
3. Processing Cost – Cost of developing sourcing and pricing requirements and guaranteeing that they arrive in a timely manner, and are of good quality
4. Quality Cost – costs that incur from making sure the buying company receives the best level of quality from the product; contributions can be made by selecting suppliers capable of producing the desired level of quality and certifying their design and manufacturing systems can improve quality while reducing organizational costs
5. Downtime cost – making sure equipment purchase is just as retains reliability and maintainability, not just a good purchase price
6. Risk cost – developing and managing relationships with suppliers and eliminating the need for unnecessary inventory and/or other sources
7. Cycle time cost – shorter