Purchasing and supply chain management : analysis, planning and practice PDF
Preview Purchasing and supply chain management : analysis, planning and practice
> ■ nil# I il ■ft 'll . i ,. . , i ... • . a- m'v - ' *>«■*’ 4 „ 1 ?■ • w -. >y>.4 %, • . N lliji [Ml [jliW mm iTTT'TTfTJ ? a s i ) * PURCHASING AND SUPPLY, CHAIN MANAGEMENT PURCHASING AND SUPPLY CHAIN MANAGEMENT ANALYSIS, PLANNING AND PRACTICE THIRD EDITION Arjan J. van Weele Professor of Purchasing and Supply Management Eindhoven University of Technology Eindhoven, The Netherlands Nyenrode, The Netherlands School of Business THOMSON _ _ _ _ _ ----™ Australia • Canada • Mexico • Singapore • Spain • United Kingdom • United States THOIVISOIM -*-- Purchasing and Supply Chain Management: Analysis, Planning and Practice Copyright © 2002 Arjan J. van Weele Business Press is a division of Thomson Learning. The Thomson logo is a registered trademark used herein under license. For more information, contact Business Press, Thomson, High Holborn House, 50-51 Bedford Row, London, WC1R 4LR or visit us on the World Wide Web at: http:/ / www.itbp.com All rights reserved by Thomson 2002. The text of this publication, or any part thereof, may not be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, storage in an information retrieval system, or otherwise, without prior permission of the publisher. While the Publisher has taken all reasonable care in the preparation of this book the publishers makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions from the book or the consequences thereof. Products and services that are referred to in this book may be either trademarks and/or registered trademarks of their respective owners. The publishers and author/s make no claim to these trademarks. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library First edition published by Chapman & Hall 1996 Second edition published 2000 by Thomson Learning Third edition published 2002 by Thomson Learning Reprinted in 2002 by Thomson ISBN 1-86152-978-3 Typeset by LaserScript, Mitcham, Surrey Printed in Singapore by Seng Lee Press Pte Ltd COLEG SIR GAR ] PSBVV KL ii W ^ J Cypher 31.03.03 658.72 VPvbA £28.99 OOOQ \ 0°^ CONTENTS Preface x Introduction xiii PART ONE: Analysis 1 The role of purchasing in the supply chain 3 Case study 3 Introduction 4 Changes in the business context 5 Impact on business strategies and structures 8 The role of purchasing in the value chain 10 Definition of concepts 14 Importance of purchasing to business 17 Purchasing, cost reduction and technological innovation 20 Classification of purchasing goods 22 New developments in purchasing 23 Summary 75 Assignments 26 2 Industrial buying behaviour: decision making in purchasing 27 Case study 27 Introduction 28 Organizational buying behaviour: basic characteristics 29 The purchasing process 30 Major bottlenecks and problems 35 The role of the purchasing department in the purchasing process 36 Models of industrial buying behaviour 39 Buying behaviour considered as an interactive process 44 Summary Assignments 30 3 The purchasing process: the buyer's role 51 Case study 31 Introduction 31 First step in the buying process: determining on purchase order specifications 32 VI Contents Second step in the buying process: supplier selection 54 Third step in the buying process: the purchasing contract 59 Steps four and five: ordering and expediting 63 Follow up and evaluation of the buying process 69 Summary 69 Assignments 70 4 Markets and products 73 Case study 73 Introduction 74 Markets and market structures 75 Purchase of goods 80 Summary 90 Assignments 90 5 The purchasing management process 93 Case study 93 Introduction 94 Primary tasks and responsibilities 94 Policy principles 98 Purchasing management process 99 How purchasing and supply management develops over time 108 Summary 113 Assignments 114 PART TWO: Planning 6 Purchasing market research 117 Case study 117 Introduction Hg Why purchasing market research? 119 Purchasing market research: definition 120 How to structure purchasing market research 120 Subjects of purchasing market research 124 Purchasing market research and information technology 125 Introduction of purchasing market research 127 Summary 129 Assignments 130 7 Purchasing and business strategy 131 Case study 132 Introduction 232 Purchasing and competitive strategy 233 Cost leadership and differentiation: consequences for manufacturing and purchasing strategy 236 Lean manufacturing 238 Integrating purchasing into company policy 140 Towards leveraged purchasing strategies 142 Contents Vll Purchasing portfolio-analysis 145 Summary 151 Assignments 153 8 Sourcing strategy: getting better results from suppliers 155 Case study 155 Introduction 156 Why suppliers do not always think and act in the interest of their clients ... 157 Main elements of supplier management 160 Getting better results from suppliers 162 The myth of partnership 164 Summary 166 Assignments 168 9 Purchasing and supply strategy, electronic market places and e-procurement 169 Case study 169 Introduction 170 Investing in purchasing: now or never? 170 Electronic market places and electronic procurement: definitions and concepts 172 Possible ICT strategies for purchasing 173 Different purchasing solutions for different purchasing objectives 176 Agent technology and the Internet 180 Summary 181 Assignments 182 10 Purchasing, engineering and quality control 183 Case study 183 Introduction 184 Purchasing and engineering 184 Purchasing's early involvement in the engineering process 185 Purchasing and quality control 191 Assessing supplier quality: diagnostic methods 199 Implementing supplier quality assurance: consequences for purchasing 301 Summary 302 Assignments 303 11 Purchasing and supply chain management 205 Case study 305 Introduction 306 Purchasing and logistics: definitions 206 Materials requirements planning 309 Basic logistics structures 312 Just-in-time management (JIT) 214 Consequences for suppliers . 220 JIT and supplier selection 224 Vlll Contents Scheduling problems between purchasing and logistics 225 Elements of the purchasing system 226 Summary 229 Assignments 230 12 Getting organized for purchasing 231 Case study 231 Introduction 232 Purchasing organization structure 233 Factors influencing the location of purchasing in the organization 234 Levels of tasks, responsibility and authority 236 Organizational structures within purchasing 238 Centralized versus decentralized purchasing: some criteria to consider 245 Consequences for purchasing professionals 250 Summary 251 Assignments 252 13 Purchasing performance measurement 253 Case study 253 Introduction 254 Factors influencing purchasing performance measurement 254 Why measure purchasing performance? 256 Problems in measuring and evaluating purchasing performance 257 What should be measured? 258 Purchasing audit as a management tool 263 Establishing a purchasing performance evaluation system 266 Summary 269 Assignments 270 PART THREE: Practice 14 Supplier assessment: cost approaches and techniques 273 Case study 273 Introduction 274 How is the purchase price determined? 274 Pricing methods 278 The learning curve 281 Supplier assessment 283 Summary 288 Assignments 288 15 Negotiating techniques and rules of conduct 291 Case study 291 Introduction 292 Characteristics of purchasing negotiations for industrial purchases 292 Recognizing negotiating situations 293 Factors which can weaken the negotiating position 294 Preparing for negotiations 295
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