Glossary · Topic
Procurement & Purchasing
32 terms from the field of Procurement & Purchasing.
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- C-parts managementC-parts management optimises the procurement and supply of low-value, frequently needed items whose process costs often exceed their value.
- Call-off orderA call-off order is an order used to draw partial quantities from an existing framework agreement on the terms agreed there.
- Category management (procurement)Category management manages procurement by spend category, with its own strategies, suppliers and targets defined for each category.
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- Demand poolingDemand pooling combines similar requirements from several sites, departments or periods in order to improve terms and processes.
- Dual sourcing and multiple sourcingDual sourcing and multiple sourcing refer to deliberately splitting a requirement between two or more qualified suppliers to reduce risk.
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- Indirect procurementIndirect procurement buys goods and services that do not go into the end product, such as MRO materials, services and operating equipment.
- Industrial distribution (technical trade)Industrial distribution refers to the specialist and wholesale trade that supplies industrial companies with rolling bearings, drive technology …
M
- Make-or-buy decisionThe make-or-buy decision determines whether a company produces a part or service itself or obtains it from an external supplier.
- Minimum order quantity (MOQ)The minimum order quantity (MOQ) is the smallest quantity of an item that a supplier accepts per order or delivers on the stated terms.
- MRO procurementMRO procurement is the purchasing of spare parts, wear parts, operating supplies and maintenance materials for ongoing plant operation.
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- Price adjustment clauseA price adjustment clause links a contractually agreed price to the development of defined cost factors such as material, energy or labour costs.
- Procurement as a serviceProcurement as a service refers to outsourcing purchasing tasks to an external service provider who takes them on as needed and often by category.
- Procurement managementProcurement management plans, steers and controls all processes through which a company obtains materials, goods and services externally.
- Procurement outsourcingIn procurement outsourcing, a company permanently hands over purchasing tasks or entire categories to an external service provider.
- Purchase requisitionA purchase requisition (PR) is an internal request from a department to purchasing to procure a material or service.
- Purchase-to-pay (P2P)Purchase-to-pay (P2P) refers to the end-to-end procurement process from the requirement notification through ordering and goods receipt to payment of …
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- Single sourcingSingle sourcing is the deliberate decision to obtain a material or part from just one supplier, even though alternatives exist.
- Spend analysisSpend analysis is the systematic evaluation of purchasing expenditure by supplier, category and business unit in order to identify potential and …
- Strategic procurementStrategic procurement defines in the long term where, how and on what terms a company covers its requirements for materials and services.
- Supplier consolidationSupplier consolidation deliberately reduces the number of suppliers in order to cut process costs, pool volumes and simplify management.
- Supplier evaluationSupplier evaluation is the systematic assessment of suppliers against fixed criteria such as quality, delivery reliability, response time, price and …
- Supplier managementSupplier management covers the selection, evaluation, development and steering of suppliers throughout the entire business relationship.
- Supplier relationship management (SRM)Supplier relationship management (SRM) is the systematic shaping of relationships with suppliers, from selection and evaluation to targeted …
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- Tail spend managementTail spend management steers the share of procurement spend spread across many small, irregular orders with numerous suppliers.
- Total cost of ownership (TCO)Total cost of ownership (TCO) captures all costs of an asset over its life cycle, from purchase price through operation and failures to disposal.
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