24205 Lecture Notes - Lecture 2: Deeper Understanding, Target Costing, Global Sourcing
Document Summary
Understanding purchasing orientation: purchasing = the process of acquiring resources and capabilities for the firm from outside providers, purchasing orientation = the overall philosophy that guides managers who make purchase-related-decisions and delineates their span and influence. Straight rebuy driven by price and availability. Modified rebuy start to modify your product/solution so you are looking for suppliers who can add a bit of differentiation to the product. New task complete negotiation, requires collaboration with suppliers. Insurance against disrupted supply: avoids supplier dependence, bargaining leverage (to maintain low prices, not limited to capacity of single supplier, access to more supplier data, stimulus to competition, greater prompt to innovation. Single sourcing advantages: one relationship to manage, greater commitment, clearer responsibilities, more leverage over supplier, simplified monitoring, easier supplier training, cheaper tooling costs, simplified scheduling. Goals of purchasing: uninterrupted flow of materials, supplies and services needed to operate to org, manage inventory minimize the investment in inventory.
