The Purchasing Handbook: A Guide for the Purchasing and Supply Professional, 6th Edition

1097 Pages·1999·10.99 MB·English

by  Joseph L. Cavinato Ralph G. Kauffman

THE PURCHASING
HANDBOOK
A Guide for the Purchasing and
Supply Professional
SIXTH EDITION
JOSEPH L. CAVINATO, Ph.D., C.P.M.
RALPH G. KAUFFMAN, Ph.D., C.P.M.
EDITORS IN CHIEF
Sponsored by the National Association of Purchasing Management
Contact NAPM at P.O. Box 22160, Tempe, Arizona 85285-2160
800/888-6276, fax: [phone], Web site: www.napm.org
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Copyright Page
The following chapters are copyrighted by the contributor, and as such no part of these
chapters may be reproduced or distributed in any form or by any means, or stored in a
database or retrieval system, without the prior written permission of the contributor.
Chapter 2—‘‘Creating Supply Advantage by Leveraging the Strategic Nature of
Procurement’’
Chapter 19—‘‘Supplier Price and Cost Analysis’’
Chapter 32—‘‘Purchase of Raw Materials and Commodities’’
Chapter 34—‘‘Software and Intellectual Property’’
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C O N T E N T S
Contributors ix
Preface xiii
PART ONE THE STRATEGIC CONTRIBUTIONS OF
PURCHASING AND SUPPLY
Introduction 1
Chapter 1
The Future of Purchasing and Supply 3
Chapter 2
Creating Supply Advantage by Leveraging the Strategic
Nature of Procurement 35
Chapter 3
Purchasing in the New Firm of the Future 61
PART TWO THE STRATEGIC APPROACHES OF
PURCHASING AND SUPPLY
Introduction 79
Chapter 4
Development of Supply Strategies 81
Chapter 5
Knowledge of Supply Markets 99
Chapter 6
Purchasing as Relationship Management 127
Chapter 7
Introduction to Supply Chain Management 145
v
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vi Contents
Chapter 8
Strategic Alliances and Partnerships 167
Chapter 9
Global Procurement Synergies 205
Chapter 10
Challenges of Outsourcing in Supply Chain Procurement:
How Best to Cope with the Changing Opportunities 221
Chapter 11
Identification and Evaluation of Sources 235
PART THREE ORGANIZATION AND COMPETENCIES OF
PURCHASING AND SUPPLY
Introduction 277
Chapter 12
Competencies and Skills in Today’s Purchasing 279
Chapter 13
Developing a Purchasing Organization 291
Chapter 14
Re-engineering Purchasing and Supply 311
Chapter 15
Human Resource Management 331
Chapter 16
Purchasing Performance Evaluation 357
Chapter 17
Ethics and Responsibility 375
PART FOUR COMPONENTS AND CAPABILITIES
Introduction 409
Contents vii
Chapter 18
Electronic Opportunities and Electronic Commerce—
New Technologies for Purchasing 411
Chapter 19
Supplier Price and Cost Analysis 437
Chapter 20
Total Cost of Ownership 485
Chapter 21
Purchasing and Supply Negotiations 499
Chapter 22
Contract and Subcontract Administration and Management
527
Chapter 23
Quality Assurance 553
Chapter 24
Value Analysis 585
Chapter 25
A Practitioner’s Guide to Forecasting 607
Chapter 26
Inventory Management 641
Chapter 27
Legal Aspects of Purchasing 665
Chapter 28
Investment Recovery 703
Chapter 29
Managing Budgets and Operations 741
Chapter 30
Marketing Purchasing and Supply 755
viii Contents
Chapter 31
Supplier Performance Evaluation 779
PART FIVE ITEM AND INDUSTRY PRACTICE
Introduction 807
Chapter 32
Purchase of Raw Materials and Commodities 809
Chapter 33
MRO Materials 833
Chapter 34
Software and Intellectual Property 855
Chapter 35
Capital and Its Impact on the Organization 881
Chapter 36
Services and Nontraditional Goods 925
Chapter 37
Construction Services Procurement 939
Chapter 38
Transportation and Related Services 963
Chapter 39
Purchasing in the Service Industry 993
Chapter 40
Purchasing and Supply Management in the Process and
Extractive Industries 1015
Chapter 41
Public/Private Purchasing 1029
PART SIX PURCHASING AND SUPPLY INFORMATION
RESOURCES 1071
Index 1075
C O N T R I B U T O R S
Mir F. Ali, MBA, Ph.D. Managing Director, AIM/AMC Corporation,
Las Vegas, Nevada (CHAP. 23)
Richard Antus, CMIR Manager, Investment Recovery, GTE Supply, Ir-
ving, Texas (CHAP. 28)
William Atkinson Freelance Writer, Carterville, Illinois (CHAP. 3)
Jack Barry President, E-time, Inc., Fairfield, Connecticut (CHAPS. 10 and
33)
William Boan, CMIR Clinton, Missouri (CHAP. 28)
Ron Brooks, CMIR Central Zone Manager, Weyerhaeuser Company,
Hot Springs, Arkansas (CHAP. 28)
Martin J. Carrara, J.D., C.P.M. Attorney, Staten Island, New York
(CHAP. 27)
Joseph R. Carter, D.B.A., C.P.M. NAPM Professor and Chair of the
Supply Chain Management Department, Arizona State University,
Tempe, Arizona (CHAP. 4)
Lawrence J. Clark, C.P.M. Purchasing Manager, Burleigh Instruments,
Fishers, New York (CHAP. 24)
Gary Colgrove Manager of Resource Recovery, 3M Company, St. Paul,
Minnesota (CHAP. 28)
Thomas A. Crimi Supply Chain TeamCoordinator, Texaco, Inc., Hous-
ton, Texas (CHAP. 40)
Richard Cuniberti, C.P.M., CMIR Supply Manager, Resource Recovery
and Ecology Services, BASF Corporation, Mount Olive, New Jersey
(CHAP. 28)
Constance Cushman, J.D., C.P.M. Attorney, New York, New York
(CHAP. 27)
Ed Dauginas Director of Purchasing, Raw Materials, Unilever Home
and Personal Care USA, Trumbull, Connecticut (CHAP. 9)
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