used by transportation carriers to record the quantity of goods delivered to a facility
blanket purchase order
for an item or group of items ordered repetitively from a supplier, purchasing may issue one of these. It is an open order, usually effective for one year, covering repeated purchases of an item or family of items
description by brand
used when a product or service is proprietary or when there is a perceived advantage to using a particular supplier’s products or services
description by market grade/industry standard
might be the best choice for standard items where the requirements are well understood and there is common agreement between supply chain partners about what certain terms mean
description by performance characteristic
focuses attention on the outcomes the customer wants, not on the precise configuration of the product or service
description by specification
when an organization needs to provide very detailed descriptions of the characteristics of an item or service. Specifications can be: materials used, manufacturing or service steps required, or physical dimensions
convenience ordering system
a system that allows users to contact suppliers directly
electronic competitive bidding tool that works exactly like an auction, but in reverse. The buyer identifies potential qualified suppliers to go online to a website at a certain time and bid to get the business. They have been found to drive costs much lower then there is adequate competition in a market
suite of tools used to achieve efficient purchasing transactions. E-procurment manages the flow of documents by 1) automating the document generation process and 2) electronically transmitting purchase documents to suppliers
electronic funds transfer (EFT)
the automatic transfer of payment from the buyer’s bank account to the supplier’s bank account
electronic acknowledgement and receipt
involves the electronic transfer of purchase documents between the buyer and seller, and can help shorten order cycle time
allows the buyer to terminate the contract in the event of persistently poor quality, delivery problems , and so on
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a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders
legally binding document
A document that two or more people sign and notarize and is one form of agreement that can be upheld in a court of law
material packing slip
provided by the supplier, it details the contents of a shipment
when internal customers try to negotiate contracts themselves
physical on hand (POH)
actual on-hand inventory levels
receive the first opportunity for new business. Has demonstrated its performance capabilities through pervious purchase contracts and therefore receives preference during the supplier selection process
purchase agreement/purchase order
takes place after the supplier selection is complete. They often contain a large number of details regarding policies because it is legally binding
the most common method of informing purchasing of material needs
used to identify user requirements, evaluate the user needs effectively and efficiently, identify suppliers who can meet that need, develop agreements with those suppliers, develop the ordering mechanism, ensure payment occurs promptly, ascertain that the need was effectively met, and drive continuous improvement.
receiving discrepancy report
details any shipping or receiving discrepancies noted by the receiving department
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record on hand (ROH)
system records of inventory
request for proposal (RFP)
if the purchase contract requires negotiation between the buyer and seller (rather than competitive bidding), purchasing sends an RFP to a supplier. More than just the price is included in the supplier’s response
request for quotation (RFQ)
in competitive bidding, the purchasing manager sends an RFQ form to a supplier. Usually take the lowest bid
span of control
functional groups carry out certain duties on behalf of the organization. The span of control is this responsibility
when an internal customer has a need that comes up suddenly that is not planned for and for which there is no preexisting supplier, such needs are handled through a spot buy approach
AKA internal customers. They have a significant stake in the outcome of purchasing’s decisions
statement of work (SOW)
specifies the work that is to be completed, when it is needed, and what type of service provider is required
supplier performance management (SPM)
one of the most important objectives of the purchasing function that includes the selection, development, and maintenance of supplier
the rate a transportation carrier charged. The US gov’t used to determine this
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