43 Glossary


Auction A seller with goods to sell invites multiple buyers to bid against each other at a set time and place to procure the goods.
Buyer The buying staff negotiates and processes purchase orders, providing assistance to end users. Their mission is to support the departments in obtaining the best products for the best prices. Their part in the procurement proces ses can include t roubleshooting vendor, invoice and payment problems where appropriate.
Cause-and-effect diagram A graphical description of the elements of a specific problem.
E-marketplace Websites where firms and suppliers conduct business-to-business activities.
E-procurement Business-to-business commerce in which procurement is made directly through a supplier’s website.
Electronic data interchange (EDI) A computer-to-computer exchange of business documents. A closed system often requiring a value-added network (VAN) to allow both buyer and seller to obtain and provide much more timely and accurate information.
Electronic or online catalogue A digitised version of a supplier’s catalogue that allows buyers to view detailed buying and specifying information about the supplier’s products and/or service through their computers’ browsers, some with online ordering and payment capabilities.
E-marketplaces Websites on which member companies buy and
sell their goods and exchange information.
Framework agreement Where a supplier agrees to provide goods or services over a given period under agreed conditions (price, specifications, delivery, etc). It then leads to individual contracts.
Internet The physical global network of computers, information servers, telephone lines, satellite links, signal routers and the name and address codes that allow access to the World Wide Web. It is run mostly on a not-for-profit basis cooperatively by local and international organisations.
Intranet A private internet set up by a company to share data with workers and provide access to the larger internet.
Reverse auction A buyer wishes to procure goods or services and invites multiple sellers to bid against one another in a declining price auction using the internet.
Outsourcing Procurement of goods and services that were originally produced in-house from an outside supplier.
Participative problem-solving Involving employees directly in the management process to identify and solve problems.
Product Result of a process and includes raw materials, components, parts and finished goods from suppliers.
Purchase order Authorising document for provision of goods or services from a supplier; becomes a legally binding contract on acceptance by the supplier.
Radio Frequency Identification (RFD) Radio waves used to transfer data, like an electronic product code, between an item with an embedded microchip and a reader.
Reverse auction A firm posts items it wants to procure on an internet e-marketplace for suppliers to bid on.
Service The result of at least one activity necessarily performed at the interface between the supplier and customer, and is generally intangible.
Standardisation The process of agreeing on a common specification. This process can take place at different levels; across an organisation, throughout an industry, across a nation and around the world.
Supplier An organisation or person that provides goods and/or services to a buying organisation.
Total Quality Management (TQM) The management of quality throughout the organisation at all management levels and across areas.
Vendor A reactive source that delivers specified goods on time. Although this term is still widely used, it is preferable to use the term supplier to refer to a source that proactively suggests savings opportunities and improvement ideas.


BLC 304/05 Procurement Management Copyright © 2009 by Wawasan Open University. All Rights Reserved.


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