The Procurement and Supply Manager's Desk Reference E-Book

Fred Sollish

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 778

Veröffentlichungsjahr: 2012

Beschreibung

Every supply manager's essential desktop tool with in-depth, authoritative coverage of each topic Leaving no stone unturned in covering all aspects of the procurement and sourcing functions, The Procurement and Supply Manager's Desk Reference, Second Edition is filled with everything every organization needs to know about the key roles and responsibilities of a procurement professional. Presented logically to match the flow of the procurement and sourcing functions, the book is filled with practical aids such as step-by-step guides to each segment of the process, as well as checklists and customizable forms. The new edition of this essential book provides an easy-to-use road map for the procurement and supply manager in the new millennium. * Coverage on how to select suppliers and measure performance * Reveals the easiest way to drive continuous improvement in the supply base * Features tips on providing value to the organization * Helps you identify those strategies that will work best for your business for years to come Written for the worldwide profession of procurement and supply management, The Procurement and Supply Manager's Desk Reference, Second Edition offers detailed coverage and tips with an eye toward incorporating proactive strategies and best practices.

Leseprobe

Contents

Cover

Title Page

Copyright

Preface to the Second Edition

Acknowledgments

Chapter 1: Procurement and Best Business Practices

Understanding Procurement

Understanding and Conveying Requirements

Creating Strategic Plans and Tactics

Finding Innovative Methods and Exploring Alternatives

Providing Procurement Services

Accepting Orders

Placing Orders

Mastering Procurement and Business Tactics

Budgets and Expense Allocation

Internal Control Systems

Establishing Procurement Methods

Internal Cost-Related Analysis Tools

Keeping Supplier Information

Summary

Chapter 2: Sourcing Management

Establishing Requirements

Creating and Organizing Requirements

Developing Specifications and Formats

Statement of Work

Terms and Conditions

Specification Traps

Locating and Developing Sources of Supply

Types of Competition

Locating Suitable Suppliers

Market Analysis: Determining Changing Marketplace Factors

Obtaining Bids and Proposals

Bidding Guidelines

Formulating the Bid or Proposal Type

Managing Sourcing Data

Categories of Existing Sources

Maintaining Sourcing Lists

The Strategic Sourcing Plan

Operational Sourcing Strategy

Summary

Chapter 3: Solicitation of Bids and Proposals

Solicitation Planning

Solicitation Methods

Summary

Chapter 4: Supplier Selection Criteria

Selecting the Supplier and Awarding the Contract

Operational Measures and Measures of Efficiency

Applying Selection Criteria

Administering the Contract

Summary

Note

Chapter 5: Contracts and the Legal Aspects of Procurement

Contract Essentials

Contract Requirements

Contract Types

Other Contract Types

Methods of Exchange

Other Contract Elements

Legal Authority and the Buyers’ Responsibilities

Reviewing Contracts for Legal Requirements

Aligning Contracts and Practices with Policy

Maintaining Procurement Documents and Records

Summary

Chapter 6: Supplier Diversity

Diversity Programs

U.S. Small Business Support

The U.S. Small Business Administration (SBA)

Contracting

The Business Case for Diversity

Supplier Diversity Best Practices

Global Supplier Diversity

Diversity Advocacy Organizations

Summary

Chapter 7: Risk Management

The Nature of Risk

Why Is Understanding Risk Important?

Risk Management Principles

Resources for Additional Information

Summary

Chapter 8: Sustainability

Issues in Sustainability

Guidelines

Lean Six Sigma

Criteria for Supplier Evaluation

Institute for Supply Management's Principles of Sustainability and Social Responsibility

Examples of Corporate Sustainability Efforts

Summary

Notes

Chapter 9: Negotiation

Assessing the Negotiating Environment

Gathering Information and Analysis

Preparing for the Negotiation

Conducting the Negotiation

Summary

Chapter 10: Contract Formation and Administration for Optimum Supplier Performance

Managing Contract Compliance

Tracking and Expediting Deliveries

Handling Supplier-Related Deviations

Summary

Chapter 11: Project Management

The Five Project Management Processes

Stage One: Initiating a Project

Stage Two: Project Planning

Stage Three: Project Execution

Stage Four: Project Controlling

Stage Five: Project Closeout

A Key Knowledge Area: Project Procurement Management

Using a Matrix Model for Project Staffing

Summary

Notes

Chapter 12: Quality

Managing Quality Performance

Ensuring Quality Performance

Summary

Chapter 13: The Procurement Function's Internal Relationships

Understanding Key Departmental Roles

Developing Good Working Relationships

Participating in Cross-Functional Operations

Reengineering Supply Management

Summary

Chapter 14: Supplier Relationship Management (SRM)

Managing Productive Supplier Relationships

Developing Continuous Improvement

Pricing Factors and Supply

Representing the Organization

Summary

Note

Chapter 15: Leveraging Computer Systems

Using Basic Information Technology Processes

Using Software for Procurement

Sourcing Supply Management Tools

Summary

Chapter 16: Financial Decisions for Sourcing

Performing Make-or-Buy Analysis

Performing Lease-or-Buy Analysis

Formulating Financial Strategies

Summary

Chapter 17: Source to Settle

Why Source to Settle?

Implementing an S2S Process

Managing the S2S Process

Outsourcing the S2S Process

Summary

Chapter 18: Material Management and Supply Operations

Inventory Control and Management Systems

Physical Management and Inventory Accounting

Disposition of Surplus Assets

Summary

Chapter 19: Logistics

The Logistics Process

Modes of Transportation

Traffic Management

Customs

Logistics in the Context of International Trade

Supplemental Information

Links

Summary

Notes

Chapter 20: Regulatory Compliance

Regulatory Factors Governing Procurement

Government Organizations and Roles, Regulations, and Controls

Tax Laws

FASB

Conformance to Law

Preventing Workplace Discrimination and Harassment

Summary

Note

About the Authors

About the Website

Index

Copyright © 2012 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Sollish, Fred. The procurement and supply manager's desk reference / Fred B. Sollish, John Semanik. – 2nd ed. p. cm. Includes index. ISBN 978-1-118-13009-4 (hardback); ISBN 978-1-118-22568-4 (ebk); ISBN 978-1-118-23849-3 (ebk); ISBN 978-1-118-26309-9 (ebk) 1. Industrial procurement—Handbooks, manuals, etc. 2. Purchasing—Handbooks, manuals, etc. 3. Materials management—Handbooks, manuals, etc. I. Semanik, John. II. Title. HD39.5.S66 2012 658.7′2—dc23 2012004857

Preface to the Second Edition

This book, now in its second edition, is written for the procurement and supply chain management professional needing a reference to the working methods available today for use on the job. It also has in mind the newly appointed executive or the staff member with only a cursory knowledge of the workings of procurement and supply management. It provides, we trust, a complete compendium of the information that is required to effectively carry out the responsibilities incumbent in the procurement and supply management area.

Leading-edge business enterprises constantly look for ways to remain competitive. The procurement and supply chain management processes outlined in this book are just some of the ways business supply managers can make key contributions to their company's bottom line. The modern world of outsourcing requires proficient expertise in procurement and supply chain management that has not been seen in any other period during our lifetimes. The future is bound to rely even more on the expertise of effective leverage and the management of supply resources.

Change is inevitable. And our profession is changing now even more rapidly than it has in the past. Therefore, we also hope this book will enable you to assess the value of new concepts and processes in our field, and assist you in keeping up with these changes. To be successful you must stay well ahead of the curve yet be ever mindful of the responsibility that rests with your choices. Make the right choices and you will succeed.

Should you wish to contact us with input, comments, or suggestions about any subject in the book, please e-mail us at [email protected].

Fred Sollish, MS, C.P.M. San Francisco, California

John Semanik, MBA, C.P.M. San Jose, California

Acknowledgments

The information in this book is largely based upon the experience we acquired over several decades as practitioners and teachers.

A thank-you goes out to those we have worked with and those who have taught us, and those professional organizations that have provided support … but mostly we want to thank our students, whose challenging questions sent us scurrying to learn more about our profession.

—Fred Sollish and John Semanik

CHAPTER 1

Procurement and Best Business Practices

The role of the procurement and supply management professional is rapidly changing. While in the past the procurement professional's area of responsibility was clearly relegated to efficient “processing” of purchase orders, the pace of today's business environment has expanded that role to control of the entire sourcing and acquisition process. To be successful in this rapidly changing, dynamic marketplace requires not only the traditionally disciplined approach to managing critical business relationships but also the ability to quickly understand and employ strategic new methods and technology. Procurement professionals today must have the ability to assess and respond effectively to current market conditions and the foresight to envision the future needs of the organization, setting into motion plans that will respond to the changing dynamics of the continually reinvented organization. Indeed, today's procurement management professional must be a master of change. And to facilitate that dynamic of change, the procurement professional must also be a master of best practices—methods shown to provide outstanding results—to continually ensure that change drives improvement in the business process and does not simply replace one poorly functioning system with another poorly functioning system. That is why we begin this Desktop Reference by reviewing the key elements of those processes and best practices that are fundamental to excellence in procurement.

Understanding Procurement

Effective procurement requires the utilization of sound business practices that maximize value to the organization through the acquisition of goods and services. This follows the old adage that the Procurement Department's role is to deliver the right material (or service) in the right amount to the right place at the right time and at the right price. You can do this by employing well-conceived strategies—a plan to enhance competitive bidding, for example—that leverage clearly defined processes to manage the supply base. As a procurement professional, you will be expected to conceive and implement strategies that employ best practices.

Employing best practices in procurement ensures that the procurement professional and ultimately the organization make correct decisions. This means that an organization must develop plans that are in alignment with its goals and best interests. Frequently, these plans evolve from well-defined sourcing strategies developed to help the organization achieve its overall objectives. In turn, sourcing strategies rely on a clear set of tactical procedures to ensure their implementation. At the root of these tactical procedures are the day-to-day methods the organization employs to convey its requirements to the supplier. Many organizations refer to these processes as standard operating procedures (SOPs) and maintain them in formalized document libraries.

Understanding and Conveying Requirements

Sound business practice requires that you understand and can clearly describe to a prospective supplier the requirement of your purchase. Unless you can describe to a supplier exactly what you need, the procurement process will not be successful. As we will detail below, this description often takes the form of a specification for materials or a statement of work (SOW) for services. Most commonly, it is the internal user who generates this information—often called a requirement—and it is the procurement professional's responsibility to ensure that it is properly conveyed to the supplier in the procurement document (such as the purchase order or contract). In the case where a purchase is particularly complex, the process of stating organizational needs is so critical that you may find a face-to-face meeting with your supplier is in order. That way, you can ensure that there are no misunderstandings or faulty interpretations of the requirement. A well-developed and well-stated requirement describing exactly what it is you expect to receive is the key to successful procurement. For this reason, you must ensure that there are systems in place that accurately convey the needs of your customers to you so that you can formalize them into a contract or purchase order. At the minimum, you should include the following elements in your procurement documents when stating requirements.

Material or Service

Describe exactly what it is you expect to receive from the supplier. This description can be provided in the form of a specification, an SOW, a drawing, a part number, or the nomenclature of an off-the-shelf or brand name part. Generally, we use a specification to describe a material requirement and an SOW to describe a service. Along with the stated quantity and the quality of the purchase, this can be the basis for approving payment and must be easy for third parties such as receiving personnel, finance, and auditors to understand after the transaction is completed.

Specification

A specification contains a technical description of the material being purchased. In its simplest terms, it can be a reference to a supplier's stock number or a brand name. It can also refer to an engineering drawing (or a set of drawings) provided by the internal user that shows the part or assembly with call-outs for the type of materials required and all necessary dimensions to produce the part. Or, in the case of chemicals and other formulated and processed materials, the specification can be tendered as a recipe or in a compositional format.

Statement of Work (SOW)

Unlike a specification, the SOW describes the requirements for a service. It may be stated in detailed and prescriptive format, describing not only what needs to be done but the method to be used (called a design specification) and how often the service must be done as well. Or it may simply be stated in terms of expected outcomes. Frequently, the SOW also contains a set of metrics describing the level of performance required (called a performance specification). The measurements used to determine the level of performance needed for a specific element are called and are often used to assess any performance requiring corrective action or, conversely, when an incentive bonus may be due.