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Strategic Supply Chain Management Leadership Program

Learning Objectives

Module 2 – Procurement and Supply Management
(13 Sessions)

1. Tactical and Strategic Procurement

  1. Procurement and Supply Management
    • Describe the relationship between procurement and supply chain management.
    • Describe the relationship between tactical and strategic procurement.

  2. Strategic Stages of Purchasing
    • Describe and differentiate the five stages of strategic procurement management.

  3. Spend Analysis
    • Define spend analysis including direct and indirect spend.
    • Understand why spend analysis is an important strategic purchasing function.
    • Prepare a goods spend analysis at your organization.
    • Recognize the opportunities from and barriers to spend analysis.

  4. Procurement Risk
    • Identify types of supply risk.

2. Procurement Processes

  1. Procurement Processes
    • Describe the steps in the procurement process.

  2. Specifications and Standardization
    • Understand the critical importance of needs description (specifications).
    • Display knowledge of the types of specifications.

  3. Specification Development and Problems
    • Describe the broad considerations to specification development.
    • Understand potential problem areas.
    • Apply principles learned.

3. Competitive Bidding and Negotiation

  1. Competitive Bidding
    • Understand the factors that suggest bidding is more appropriate than negotiation and vice versa.
    • Determine whether negotiation or bidding is more suited to a particular situation.

  2. Types of Competitive Bids
    • Describe types of bids.

  3. Negotiation
    • State the objectives of a negotiation.

  4. What Can Be Negotiated
    • Define the keys steps in negotiations.

  5. The Negotiation Plan
    • Prepare a negotiating plan.

4. Procurement and Supply Management Organization

  1. Procurement Internal Relationships
    • Identify the relationships between procurement and other functional areas of an organization.

  2. The Leverage Effect of Improved Procurement on Financial Results


  3. Cross-Functional Teams
    • Describe the reasons for/benefits of using of cross functional purchasing teams.
    • Discuss the problems in using cross functional teams.
    • Understand the critical success factors for cross functional teams.

  4. Ways of Organizing Procurement
    • Describe range of options for organizing procurement.
    • Assess the options for the organization of procurement in an organization.

5. Make or Buy

  1. Make or Buy
    • Describe the factors (quantitative and qualitative) that enter into the make or buy decision.

  2. Core Competencies
    • Explain the concept of core competency.
    • Describe the role of core competencies in creating competitive advantage.
    • Identify core competencies of an organization.

  3. Total Cost of Ownership: Elements


  4. Total Cost of Ownership: Benefits
    • Describe the benefits of the total cost of ownership approach.

  5. Total Cost of Ownership: Implementation
    • Conduct a total cost of ownership analysis for a product or service used in an organization.
    • Use total cost of ownership to support a make or buy decision.

6. Price and Cost Analysis

  1. What is the Right Price?

  2. Price Assessment
    • Conduct a price assessment.
    • Understand that lowest price is not necessarily the best option.

  3. Discounts
    • Describe different types of discounts.

  4. Market Conditions and Price Negotiation Strength (Procurement Leverage)


  5. Cost Analysis
    • Describe types of cost analyses.

  6. Types of Costs: Direct Costs and Indirect Costs
    • Distinguish the components of direct and indirect costs.
    • Conduct a cost analysis.

  7. Profit
    • Describe considerations with respect to supplier profit.

  8. Learning Curves
    • Understand, at a general level, the importance of learning curves in cost analysis.

7. Quality and Inventory

  1. Factors That Affect Long Run Quality
    • Understand factors that affect quality.

  2. Total Quality Management
    • Discuss the merits of product testing and the proposal analysis technique in assuring quality.
    • Identify the difference between error detection and error prevention.
    • Describe some common total quality management systems.
    • Weigh the pros and cons of implementing ISO 9001: 2000 standards in your organization.

  3. Quality Training for Procurement Staff
    • Outline the benefits of a strategic purchasing organization having quality management training.

  4. Purposes of Inventory
    • Describe the purposes of inventory.

  5. Forecasting Demand


  6. Inventory Models
    • Use basic inventory models.

  7. Inventory Relationships
    • Outline the relationship between delivery issues and inventory.
    • Discuss the trade-off between inventory and customer service.

8. Supplier Selection

  1. Supplier Selection: Weighted Evaluation Systems
    • Identify potential supply sources.
    • Produce an evaluation matrix for supplier selection.

  2. Supplier Selection: Product Attribute Considerations
    • Describe different types of products (routine order, procedural, performance and political) as they effect supplier selection.
    • Connect the product type with supplier selection criteria.

  3. Supplier Selection: Total Cost Approach
    • Understand the elements of the total cost approach of selecting suppliers: risk factors, business desirable factors, and measurable cost factors.
    • Select a supplier using the total cost of ownership approach.

  4. Single versus Multiple Sourcing
    • Describe factors that suggest an organization should use a single source for a good or service.
    • Describe the factors that suggest an organization should use multiple sources for a good or service.

  5. Issues in Determining the Perfect Number of Suppliers
    • Understand the difficulties in negotiating in a sole source situation.
    • Defend a single versus multiple source decision.

9. Supplier Development and Certification

  1. rocurement Performance Monitoring: Eight Best Practices
    • Describe the best practices in procurement performance measurement.

  2. Procurement Performance Monitoring: Measures
    • Specify procurement performance measures for an organization.

  3. Approaches to Supplier Development
    • Identify the many types of supplier development approaches.

  4. Objectives of Supplier Certification Programs
    • Describe the objectives of supplier certification.

  5. Benefits of Supplier Certification
    • Discuss the benefits of supplier certification.

  6. Supplier Certification: Steps
    • Apply the general steps in the supplier certification process.

  7. Product Development Cycle Times and Supplier Performance Measurement
    • Describe the use product cycle times in supplier performance management.

10. Services Procurement

  1. Services are Different
    • Describe the unique aspects of services procurement.
    • Describe the tactical and strategic considerations related to services procurement.

  2. Services are the Same: Procurement Involvement
    • Assess the need for procurement’s involvement in services buying.

  3. Services Spend Analysis
    • Conduct a services spend analysis.

  4. Specification: Statements of Work
    • Outline the elements of a statement of work.
    • Prepare a statement of work

  5. Specification: Service Level Agreements
    • Outline the elements of a service level agreement.
    • Prepare a service level agreement.

11. e-Procurement

  1. Forms of e-Procurement
    • Describe electronic data interchange, e-catalogs, e-marketplaces and e-auctions.

  2. Pros and Cons of e-Procurement
    • Discuss the advantages of e-procurement.
    • Discuss the disadvantages of e-procurement.

  3. e-Procurement Knowledge Areas


  4. Implementing e-Procurement
    • Lead a discussion on the many aspects of and potential of e-procurement for your organization.

  5. Reverse Auctions: Steps
    • Apply the steps in reverse auctions.

  6. Reverse Auctions: Issues
    • Assess the impact of reverse auctions on total costs and supplier relations.

12. Involving Users and Suppliers

  1. P-Cards: Benefits
    • Describe the benefits available through effective use of p-cards.

  2. P-Cards: Considerations in Implementation
    • Understand the challenges related to implementing a p-card program.
    • Estimate the savings from implementing p-cards at your organization

  3. Vendor (Supplier) Managed Inventory: Benefits
    • Understand the dual gains to vendors (suppliers/manufacturers) and buyers possible from vendor managed inventories.
    • Describe the benefits of a vendor managed inventory approach.

  4. Implementing Vendor Managed Inventory
    • Develop a VMI inventory implementation plan.

  5. Just In Time


  6. Just In Time II
    • Describe how JIT II works along with its benefits.