65 Glossary



Customer development Involves having your supplier transferring knowledge and expertise to your company.
Description Refers to any one of a variety of methods or, indeed, may be a combination of several different methods, by which a buyer conveys to a seller a clear, accurate picture of the required item.
Expedite To speed up orders so that they are completed in less than their normal lead time.
Maintenance, supply and overhaul items Items which are needed repeatedly or recurrently to maintain the operating efficiency of the business. e.g., electrical supplies, caretaking requirements, lubricants, paint, plumbing accessories and a wide range of repair parts or spares for plant and equipment.
MRO items Maintenance, repair and operating items. They are made up of two broad categories of items: Operating supplies and maintenance, supply and overhaul items.
Operating supplies Consumable items used in the operations of the business enterprise, e.g., stationery, office supplies, machine oil, fasteners, insecticides, fuel, small tools and packaging materials.
Procurement category General families of procurement products or services. Examples of major commodity classifications across different industries include body side mouldings (automotive), microprocessors (computer) , steel (metalworking), cotton (apparel), wood (pulp and paper), petroleum products (chemicals), outsourced business processes (IT programming, call centres), and office
supplies (all industries).
Specification A statement of the attributes of a product or service or a statement of needs to be satisfied by the procurement of external resources. Specification is one particular method of description.
Snowball sampling Finding experts in a particular category who can refer you to other experts whom you can also talk with.
Sourcing A key procurement activity — the process of identifying, selecting and developing suppliers.
Standard A specification intended for recurrent use. Standards differ from specifications in that, while every standard is a specification, not every specification is a standard. The guiding principle of standardisation is the elimination of unnecessary variety.
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.
Strategic sourcing Where procurement is viewed as a knowledgebased activity concerned with the total cost of ownership rather than the price paid per item with the optional mix of relationships to provide competitive advantage.
Supplier development Involves your company helping the supplier make improvements through the knowledge your company has gained that is of use to the supplier.
Tariff A schedule of duties (charges) imposed on the value of the goods imported (or in some cases, exported) into a country.
Transactional sourcing Where procurement is viewed as a function concerned with the placement of orders.
Value analysis A structured problem-solving approach that is used to develop an optimal solution to particular requirements in the re-designing of existing products.
Value engineering A structured problem-solving approach that is used to develop an optimal solution to particular requirements in the design of new products.


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


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