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Course 1: Procurement and Sourcing Introduction - Coggle Diagram
Course 1: Procurement and Sourcing Introduction
Purchasing & Procurement
Procurement
Operational Purchasing (Procure-to-Pay)
Accounts Payable
Negotiation & Contract Management
Vendor Data & Performance Management
Spend Analysis & Sourcing
All other processes supporting procurement activities
Difference Between Procurement and Purchasing
Strategic
Mission
Purchasing
Consignment
Stock Purchases (Inventory)
Non-Stock Purchases (Expense)
Subcontracting
Challenges in
procurement in an organization
Difficulty tracking contracts
Supply agreements can be complex, with different terms, varying durations, multiple schedules, and amendments
Many organizations attempt to track contracts manually.
Some frauds
Have a fraudulent relationship with employees in the company to receive commissions.
Unable to control the quality of goods
Not guarantee the quality of the goods,
Or do buyers use company funds to serve their personal interests
Lack of technology
Affects
Plan
Make a purchasing decision
Analyze
Solution
Improve technology skills
Apply new tools and techniques
Good supplier relationship and poor supplier relationship
Benefits
On time delivery
Less price Fluctuation
Save money
Drawbacks
Business disruption
Quality will start to suffer
High price
Differences between
commodity management and category management
Commodity Management
A governance framework and processes
Review, plan, collect, and control the entire lifecycle activities of a particular group of goods and/or services
Managed and responsible
Must report, Responsible, Involved in inventory, cash cycle management, understanding and setting trends and directions for strategic
Similarities and Differences
Commodity Management: Staff purchasing materials for electronic components processing factory. They need many material suppliers to always be available for reference as well as to supply raw materials for the product developers of the manufacturer.
Category Management: Always have to link to sell, buy, sell and import goods based on the tastes of shoppers.
Category Management
Definition
Businesses divide their spending into areas containing similar or related products, helping to focus on consolidation and efficiency opportunities.
Category managers
Responsible for Sales and MKT of the categories.
Manage the entire sourcing process and strategy.
Analytics: Performance at granular level, competitors, revenue, price, inventory, products
Win - win relationship in business
Why we need a win win
relationship with partner ?
Introduce the company
to partners and consumers.
A successful strategy for you and your Suppliers.
Helps build and strengthen strong,
long-term relationships.
Creating a basis for promoting the functions and resources of each party
How we need a win - win
relationship with partner ?
We need to raise expectations, relax our technical requirements and have to work and communicate with Suppliers .
We need to clearly state the expectation .
Communicate regularly
Be gentle, encourage, reward suppliers, support suppliers' requests if we find it reasonable.
Trends in the procurement nowadays
The current procurement trend
Indirect procurement
Procurement in the past
Management Skills
Supplier relationship management
Portfolio management
Procurement at present
Types of procurement
Direct procurement
Indirect procurement
7 Trending disrupts purchasing
Supplier Enabled Innovation (SEI)
Digitalization
Total Value Ownership (TVO)
Circular Economy
Request for Solution (RFS)
Young Talent
Responsible Sourcing
Previous procurement trends
The Difficulties of Direct Procurement
Advantages of Direct Procurement
How to SELL Procurement
Definition