Procurement Course

TOPIC OF THE DAY - 16th Feb 2012

2012-02-16T21:08:00.000+10:00

It's Thursday! So what quick Procurement topic do we have for you today?

See if you can guess what it is!

HINTS:

It's a type of project
It starts with a 'G'
And its the opposite of a Brownfield Project

CLICK TO FIND OUT

Courses You May Be Interested In:

Professional Purchasing Project Management

TOPIC OF THE DAY! - 15th Feb 2012

2012-02-15T20:40:00.002+10:00

Happy Wednesday!

Today's topic comes from the Purchasing side of the equation.

HINT:

It's a type of Purchasing
It starts with a 'T'
And its the opposite of Strategic Purchasing

Can you guess what it is? CLICK TO FIND OUT

Courses You May Be Interested In:

TOPIC OF THE DAY - 14th Feb 2012

2012-02-14T20:40:00.000+10:00

Tuesday has arrived!

What is today's exciting topic?.

HINT: It starts with an 'E' and is about speeding up the delivery of goods.

Any guesses?

CLICK HERE TO FIND OUT

TOPIC OF THE DAY - 13th Feb 2012

2012-02-12T21:41:00.000+10:00

Hello, It's Monday again!

Let's start the week with a quick look at a particular style of negotiating.

HINT: It's the opposite of co-operative.

Can you guess what it is?

CLICK HERE TO FIND OUT

TOPIC OF THE DAY - 12th Feb 2012

2012-02-12T20:47:00.001+10:00

Happy Sunday!

Today's topic comes from the logistical side of procurement.

HINT: Its initials are 3.P.L.

Can you guess what it is?

CLICK HERE TO FIND OUT

Procurement Course

2012-01-26T23:29:00.000+10:00

Welcome!

This site includes:

A growing list of Procurement Topics to enjoy browsing through each day. (Topics are located on the left and right hand side of the screen)

Online Purchasing Courses, Procurement Certification, Supply Chain Training, Certifications, and more.

And be sure to follow on Twitter by clicking below:
Follow @procurementfeed

Enjoy your stay and see you again tomorrow!

What is a Lien?

2012-01-08T13:55:00.000+10:00

A company can put a contractual Lien on a debtor's property that is in their possession, which means they have the right to hold/sell the goods in the event of an unsatisfied debt.

For example, a shipping company may include a lien clause in their contract to the effect of the following:

'The Company will have a general lien on the property of the debtor which are in, or come into possession of the company. The Company has the right to sell the property at auction if the debt has not been satisfied within 14 days notice of exercising of the lien....."

Related Procurement Topics:

What is Force Majeure?

What is an Indemnity?

What is 'Time is of the Essence'?

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What is Category Management?

2011-12-11T19:27:00.001+10:00

When a business' spend is broken down into categories, and these categories are managed as their own strategic business unit, this is known as Category Management.

Category Managers perform activities within their unit such as implementing commercial arrangements, data and demand analysis, strategic sourcing, reducing total cost of ownership, and more.

Categories vary from industry to industry, but if we look at the mining industry for example, categories could include:

Underground Equipment, Plant Equipment, Mining Services, Mining Projects, Materials Handling, Transport, IT, Facilities...

Related Procurement Topics:

Inventory Management

Project Management

Supply Chain Management

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Cloud Computing in Procurement

2011-12-03T13:51:00.001+10:00

Cloud Computing allows a company to have all of their Procurement applications (eg: ERP system, Desktop Applications) and other data (contracts, tenders, emails, folders) provided as an online service from anywhere with an internet connection (computers, phones, tablets etc), through off-site dedicated servers (known as a cloud).

For example, a Procurement Officer starts a new job at a company that uses cloud computing. To use the ERP System, the officer is simply given a login/password to the 'cloud', and is up and running. There is no need for time/cost wasters such as software installations, software upgrades, license requests, on-site servers etc, as it is all delivered as a service (usually subscription) from a cloud computing provider, through an internet protocol.

Upgrades to computer speed and technology is also required less due to the majority of burden being bared by the cloud servers. Current concerns with cloud computing include privacy and security of information.

Related Procurement Topics:

EDI (Electronic Data Interchange)

ERP (Enterprise Resource Planning)

E-Sourcing

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Business Process Outsourcing (BPO)

2011-11-24T21:13:00.001+10:00

BPO (Business Process Outsourcing) is when a company contracts out a business function (eg: marketing, payroll, accounts) to a third party. An internet service provider outsourcing their customer service center to an overseas party is an example of Offshore BPO.

Related Procurement Topics:

Outsourcing

Third-Party Logistics (3PL)

Business Efficacy

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What is Expediting?

2011-11-19T10:01:00.001+10:00

In Purchasing, the process of Expediting means to chase up purchase orders to ensure the most timely delivery possible.

As Expediting is a vital part of the Purchasing function, some larger companies employ an Expediting Officer purely to focus on this process.

Here are some of tasks of an Expediting Officer:

Running regular reports on overdue orders

Phoning/emailing suppliers to chase orders

Sending Expedite Requests to suppliers

Visiting suppliers' premises and inspecting their production processes

Following up on Expedite Responses

Organizing best freight methods to ensure delivery times are met

Fixing any issues which are affecting the flow of deliveries

Online Courses That May Interest You:

Expert Purchasing Management

Professional Purchasing Project Management

Related Procurement Topics:

Transactional Purchasing

Purchase Order

Procurement Definition

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Electronic Data Interchange (EDI)

2011-11-11T19:49:00.001+10:00

Electronic Data Interchange (EDI) refers to the system protocols that companies use to communicate information between each other.

For instance, some companies are fully integrated to send/receive communications between each other's ERP systems (eg: SAP & Ellipse), for transactions such as Purchase Orders, Invoices, Order Acknowledgments, and Change Orders.

For example, a Purchasing Officer for a mining company creates a purchase order in the SAP system for three hydraulic pumps. The order then transmits through an online portal, where it is converted into a computer language that can be read by the supplier's Ellipse System.

The order then appears on the supplier's Ellipse system, where it is automatically accepted due to the part number and price being correct. An order acknowledgment is automatically transmitted back to the purchasing officer's SAP system, confirming the order has been accepted.

Related Procurement Topics:

ERP Systems

E-Sourcing

5 Rights of Purchasing

What is Direct Charge Purchasing?

2011-10-26T20:11:00.000+10:00

Direct Charge refers to the purchasing of products/services that bypass the inventory, going directly onto the cost of a project/job/repair etc.

The opposite of direct charge purchasing would be inventory/stock catalogue purchasing.

Related Procurement Topics:

Project Management

Transactional Purchasing

E-Sourcing

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What is a Greenfield Project?

2011-10-21T09:26:00.000+10:00

A project where there has never been any prior construction or exploration is considered 'Greenfield'.

For example, a coal-mining company setting up operations on unexplored territory would classify this project as 'Greenfield'.

On the other hand, a coal-mining company setting up operations on or near an area previously mined for coal, would classify this project as 'Brownfield'.

Online Courses That May Interest You:

Professional Purchasing Project Management

Related Procurement Topics:

EPCM

Project Management

Monopoly Vs Monopsony

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What does EPCM stand for?

2011-10-09T14:46:00.000+10:00

You may have seen the term EPCM in job advertisements, eg: "Procurement Specialist required for Global EPCM company..." or "our EPCM client needs experienced Purchasing Officer..".

An EPCM is a company that is contracted to handle the Engineering, Procurement, and Construction Management of a project.

This differs from an EPC (Engineering, Procurement, and Construction) company, in that an EPC would have a contract solely with the project owner, whereas an EPCM would form multiple contracts with many suppliers in the course of their management of the project.

Related Procurement Topics:

Procurement Definition

Project Management

Cost Reimbursement Vs Fixed Price

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Third-Party Logistics (3PL)

2011-10-01T14:43:00.000+10:00

Third-Party Logistics, aka 3PL, is the outsourcing of all or part of a company's supply chain functions. Examples of outsourced functions include warehousing, order-picking, inventory management, freighting, packing etc.

For example, a New Zealand company that has customers in China may wish to hold some stock nearer to their customers. With the assistance of a 3PL provider, the company can have stock held in a warehouse in China, and have it dispatched upon request.

Related Procurement Topics:

Logistics

Multi-modal Transport

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RMA and GRA

2011-09-11T18:30:00.000+10:00

An RMA (Return Merchandise Authority) is a form/number a customer requests from a Supplier to return faulty/damaged goods. When requesting an RMA, a customer usually has to provide details such as product number, description, serial numbers, and details of the problem. It is also known as a GRA (Goods Return Authority).

For instance, a customer has issues with a modem they bought off a communications company. The customer goes to the supplier's website and fills out a detailed RMA form requesting to return the item for warranty repair/replacement. The supplier then issues an RMA Number for the customer to return the goods on.

Related Procurement Topics:

Inventory Management

Consumables

Top 3 Skills in Purchasing

Waiver Clause

2011-08-01T21:24:00.001+10:00

A Waiver clause in a contract asserts a party's right to enforce terms even if a breach has been verbally waived, or assumed to be accepted due to the conduct of a party.

For example, a purchasing officer may accept a late delivery of product without complaint, but due to the Waiver Clause in the company's contract, this conduct by the purchasing officer would not waive the supplier's obligations to deliver goods on time.

Related Procurement Topics:

Privity of Contract

Liquidated Damages

Indemnity

Innominate Terms

2011-07-16T12:15:00.000+10:00

A contract term that is not clearly defined as a condition or warranty is classified as a Innominate Term. If there is a breach of an innominate term, a court has to evaluate the degree of 'injury' the breach has caused, and make a decision as to whether it is a condition or warranty.

If the court classifies the breach as a condition, the injured party may retract their obligations under the contract, or claim damages.

For further reading on this and other Contract Law topics check out this book Contract Law: Uk Edition (Law Express: Law Revision)

Related Procurement Topics:

BoilerPlate

Standard T & C's

Time is of the Essence

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Economies of Scale

2011-07-05T21:27:00.001+10:00

Economies of scale is the idea that when a company increases in size, it can obtain higher cost savings in areas such as:

production (lower cost per unit)
purchasing (buying power via larger volume orders).

The disadvantages that can arise through a company's expansion are simply called Dis-economies of scale.

Related Procurement Topics:

Elasticity of Demand

Corporate Governance

Time is of the Essence

Develop your skills with an Online Course

Bottleneck Items

2011-06-28T20:27:00.001+10:00

In manufacturing, an item that has a LOW impact on profit but a HIGH risk of supply is classed as a Bottleneck Item. Running short on this item would 'bottleneck' the manufacturing process.

Therefore, strategies need to be put into place to ensure a reliable supply (eg: holding more stock on the shelf; effectively managing the supplier relationship; negotiating an supply agreement).

Bottleneck Example: A manufacturing company builds their own hydraulic pumps, which are very popular in the mining industry. Each pump is made up of 50 different parts, including nuts, bolts, piping, machined parts and so on.

Supply of these parts are not an issue except for a specially made check valve which can only be bought from one (unreliable) supplier.

On the scheduled day of production, all 50 items except the check valve have arrived. The Procurement officer chases the supplier and is advised the check valves have been delayed for another two weeks. Due to this check valve not arriving, there is a bottleneck in the production of the pumps.

Related Procurement Topics:

Lean Manufacturing

Inventory Management

5 Rights of Purchasing

Develop your skills with an Online Course

Contra Proferentem

2011-06-20T22:40:00.001+10:00

In contract law, the rule of 'Contra Proferentum' asserts that when a contract term is ambiguous, a court will interpret it to the disadvantage of the party attempting to rely on it.

Related Procurement Topics:

Consideration

Entire Agreement Clause

Variation Clause

Privity of Contract

2011-06-08T22:07:00.002+10:00

Privity of Contract refers to the general rule that only parties to a contract can acquire rights and liabilities under that contract. Therefore a third party would generally not be able to enforce a contract term, or sue for breach of contract, because they are not "privy" to the contract.

For further reading on this and other Contract Law topics check out this book Contract Law: Uk Edition (Law Express: Law Revision)

Related Procurement Topics:

BoilerPlate

Standard T & C's

Time is of the Essence

Develop your skills with an Online Course

Ghost FCL

2011-06-08T19:43:00.001+10:00

In international shipping, you may hear the term 'Ghost FCL' floating around. Although not an official term out of a shipping text book, it refers to an LCL shipment that is being charged at an FCL freight rate. A Ghost FCL is treated exactly the same as an LCL shipment, insofar as all other charges and unpacking time-frames, the only difference being the said rate. It is an optional rate that can be applied by a customs broker for the benefit of their clients.

Related Procurement Topics:

Difference between FCL & LCL

FOB Free on Board

Purchasing and Procurement Courses

Procurement Course

TOPIC OF THE DAY - 16th Feb 2012

TOPIC OF THE DAY! - 15th Feb 2012

TOPIC OF THE DAY - 14th Feb 2012

TOPIC OF THE DAY - 13th Feb 2012

TOPIC OF THE DAY - 12th Feb 2012

Top 10 Procurement Topics

Procurement Course

What is a Lien?

What is Category Management?

Cloud Computing in Procurement

Business Process Outsourcing (BPO)

What is Expediting?

Electronic Data Interchange (EDI)

What is Direct Charge Purchasing?

What is a Greenfield Project?

What does EPCM stand for?

Third-Party Logistics (3PL)

RMA and GRA

Waiver Clause

Innominate Terms

Economies of Scale

Bottleneck Items

Contra Proferentem

Privity of Contract

Ghost FCL