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The Procurement and Supply Manager's Desk Reference PDF

482 Pages·2007·5.63 MB·English
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T P HE ROCUREMENT AND S M UPPLY ANAGER’S D R ESK EFERENCE FRED B. SOLLISH, C.P.M. JOHN SEMANIK, C.P.M. JOHN WILEY & SONS, INC. T P HE ROCUREMENT AND S M UPPLY ANAGER’S D R ESK EFERENCE FRED B. SOLLISH, C.P.M. JOHN SEMANIK, C.P.M. JOHN WILEY & SONS, INC. This book is printed on acid-free paper. Copyright  2007 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. Wiley Bicentennial Logo: Richard J. Pacifico No part of this publication may be reproduced, stored in a retrieval system,or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriateper-copyfeeto theCopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993 or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print, however, may not be available in electronic format. For more information about Wiley products, visit our Web site at http://www.wiley.com. Library of Congress Cataloging-in-Publication Data: Sollish, Fred. The procurement and supply manager’s desk reference / Fred B. Sollish, John Semanik. p. cm. Includes bibliographical references and index. ISBN: 978-0-471-79043-3 (cloth) 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 2007 658.7’2—dc22 2006034362 Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1 CONTENTS Preface ix Acknowledgements xi CHAPTER 1 PROCUREMENT AND BEST BUSINESS PRACTICES 1 1.1 Understanding Procurement 2 1.2 Understanding and Conveying Requirements 3 1.3 Creating Strategic Plans and Tactics 5 1.4 Finding Innovative Methods and Exploring Alternatives 6 1.5 Providing Procurement Services 7 1.6 Accepting Orders 8 1.7 Placing Orders 12 1.8 Mastering Procurement and Business Tactics 15 1.9 Budgets and Expense Allocation 15 1.10 Internal Control Systems 16 1.11 Establishing Procurement Methods 17 1.12 Internal Cost-Related Analysis Tools 19 1.13 Keeping Supplier Information 23 1.14 Summary 24 CHAPTER 2 SOURCING MANAGEMENT 26 2.1 Establishing Requirements 27 2.2 Creating and Organizing Requirements 28 2.3 Developing Specifications and Formats 29 2.4 Specification Traps 34 2.5 Locating and Developing Sources of Supply 35 2.6 Types of Competition 38 2.7 Locating Suitable Suppliers 39 2.8 Determining Changing Marketplace Factors 41 2.9 Obtaining Bids and Proposals 42 2.10 Bidding Guidelines 43 iii iv Contents 2.11 Formulating the Bid or Proposal Type 44 2.12 Managing Sourcing Data 47 2.13 Types of Sourcing 47 2.14 Maintaining Sourcing Lists 48 2.15 Regulatory Factors Governing Procurement 49 2.16 Import/Export Issues 54 2.17 Summary 54 CHAPTER 3 SELECTING SUPPLIERS AND MEASURING PERFORMANCE 56 3.1 SelectingtheSupplierandAwardingtheContract 57 3.2 Applying Selection Criteria 62 3.3 Administering the Contract 73 3.4 Summary 78 CHAPTER 4 CONTRACT ADMINISTRATION 79 4.1 Contract Essentials 80 4.2 Reviewing Contracts for Legal Requirements 93 4.3 Aligning Contracts and Practices with Policy 95 4.4 Maintaining Procurement Documents and Records 97 4.5 Summary 98 CHAPTER 5 ADMINISTERING CONTRACTSFOR OPTIMUM SUPPLIER PERFORMANCE 100 5.1 Managing Contract Compliance 101 5.2 Tracking and Expediting Deliveries 110 5.3 Handling Supplier-Related Deviations 111 5.4 Summary 119 CHAPTER 6 PROJECT MANAGEMENT 121 6.1 The Five Project Management Processes 121 6.2 Stage One: Initiating a Project 124 6.3 Stage Two: Project Planning 126 6.4 Stage Three: Project Execution 133 6.5 Stage Four: Project Controlling 137 Contents v 6.6 Stage Five: Project Closeout 140 6.7 A Key Knowledge Area: Project Procurement Management 141 6.8 Summary 144 CHAPTER 7 NEGOTIATIONS 145 7.1 Assessing the Negotiating Environment 146 7.2 Gathering Information and Analysis 149 7.3 Preparing for the Negotiation 153 7.4 Conducting the Negotiation 160 7.5 Summary 165 CHAPTER 8 LEVERAGING COMPUTER SYSTEMS 166 8.1 Using Basic Information Technology Processes 167 8.2 Using Software for Procurement 171 8.3 Sourcing Supply Management Tools 180 8.4 Summary 182 CHAPTER 9 QUALITY 183 9.1 Managing Quality Performance 184 9.2 Ensuring Quality Performance 189 9.3 Summary 195 CHAPTER 10 PROCUREMENT’S INTERNAL RELATIONSHIPS 196 10.1 Understanding Key Departmental Roles 197 10.2 Developing Good Working Relationships 204 10.3 Participating in Cross-Functional Operations 206 10.4 Reengineering Supply Management 210 10.5 Summary 216 CHAPTER 11 SUPPLIER RELATIONSHIP MANAGEMENT 217 11.1 Managing Productive Supplier Relationships 218 11.2 Developing Continuous Improvement 223 11.3 Pricing Factors and Supply 225 11.4 Representing the Organization 230 11.5 Summary 234 vi Contents CHAPTER 12 FINANCIAL DECISIONS FOR SOURCING 235 12.1 Performing Make-or-Buy Analysis 236 12.2 Performing Lease-or-Buy Analysis 241 12.3 Formulating Financial Strategies 244 12.4 Summary 249 CHAPTER 13 MATERIAL MANAGEMENT AND SUPPLY OPERATIONS 251 13.1 Inventory Control and Management Systems 252 13.2 Physical Management and Inventory Accounting 262 13.3 Disposition Surplus Assets 264 13.4 Summary 268 CHAPTER 14 LOGISTICS 269 14.1 The Logistics Process 270 14.2 Modes of Transportation 277 14.3 Traffic Management 281 14.4 Customs 283 14.5 Logistics in the Context of International Trade 286 14.6 Government Organizations and Roles, Regulations, and Controls 294 14.7 Supplemental Information 300 14.8 Summary 303 14.9 Links 304 CHAPTER 15 PROVIDING VALUE TOTHE ORGANIZATION 306 15.1 Standardizing Purchased Materials 307 15.2 Improving Procurement-Related Processes 311 15.3 Controlling and Reducing Cost 313 15.4 Supporting New Product Introduction 317 15.5 Summary 318 CHAPTER 16 STRATEGIC PLANNING FOR PROCUREMENT 320 16.1 Developing Demand- and Forecast-Based Procurement Strategies 321 Contents vii 16.2 Planning Procurement Requirements 327 16.3 Conducting Market Analysis 333 16.4 Summary 347 CHAPTER 17 THE PROCUREMENT ORGANIZATION 349 17.1 Planning Procurement Strategies and Objectives 350 17.2 Developing Departmental Goals and Objectives 355 17.3 Formulating Operational Policies and Procedures 357 17.4 Preparing Departmental Reports 360 17.5 Responding to Audits 366 17.6 Evaluating Procurement Department Performance 369 17.7 Administering Departmental Budgets 371 17.8 Budgeting Processes 372 17.9 Working with Operational Forms 373 17.10 Summary 375 CHAPTER 18 HUMAN RESOURCES FOR PROCUREMENT 377 18.1 Leading the Supply Management Team 378 18.2 Recruiting, Hiring, Promoting, and Terminating Employees 384 18.3 Training for Professional Competence 387 18.4 Job Performance 390 18.5 Handling Employee Performance Issues 393 18.6 Preventing Workplace Discrimination and Harassment 396 18.7 Summary 400 APPENDIX A Sample Purchase Requisition Form 402 APPENDIX B Sample Purchase Order Form 403 APPENDIX C Electronic Catalog Example 404 APPENDIX D Common Auction Types 407 APPENDIX E Commonly Used Financial Ratios 409 viii Contents APPENDIX F Request for Proposal (RFP) Example 411 APPENDIX G Request for Quotation Example 434 APPENDIX H Outline of Uniform Commercial Code and Article 2 435 APPENDIX I Important U.S. Import/Export Regulations 440 APPENDIX J Sample Terms and Conditions 441 APPENDIX K Links to Related Professional Organizations 448 Bibliography 453 Index 458

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The Procurement and Supply Manager's Desk Reference"Finally, a cohesive volume written for the worldwide profession of purchasing and supply chain management."—James D. Reeds, CPM, CFPIM, CIRM, CPCM, President, Institute for Supply Management-Silicon Valley"Great resource. This work is educational
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Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.