This is an annual report required by the U.S. Securities and Exchange Commission (SEC), providing a comprehensive summary of a company's financial performance. It's used in procurement for supplier evaluation and risk assessment.

This is the process of matching the purchase order, delivery receipt, and supplier invoice before making a payment. It's a key control in the procurement process to prevent erroneous and fraudulent payments.

This is a performance appraisal system where an individual receives anonymous feedback from different people within the organization. It's used in supplier performance evaluations and internal assessments.

This involves an arrangement where a firm contracts out the entire logistics function to a two-part arrangement consisting of a primary logistics service provider and secondary providers. It's a comprehensive supply chain solution.

This is a workplace organization method that describes how to manage a workspace for efficiency and effectiveness. The five S's stand for Sort, Set in order, Shine, Standardize, and Sustain.

This is a set of techniques and tools for process improvement. It seeks to improve the quality of process outputs by identifying and removing causes of defects.

This is a concept from Lean Manufacturing, identifying seven areas where production can be optimized. They are Transport, Inventory, Motion, Waiting, Overproduction, Over-processing, and Defects.

Also known as the Pareto Principle, this rule suggests that 80% of results come from 20% of efforts. In procurement, it's often observed that a small percentage of suppliers make up a large percentage of spend.

This is a problem-solving approach typically employed by quality engineers or other professionals. Its purpose is to identify, correct, and eliminate recurring problems, making it useful in supplier quality management.

This is a matrix tool that is used to evaluate an employee's level of contribution to the organization and their potential to contribute in the future. It's often used in procurement for talent management and succession planning.

A data structure used for allocating goods, costs, or other values among various departments, projects, or cost centers.

A list of suppliers that an organization has vetted and approved for doing business with. This list is crucial for ensuring quality, compliance, and risk management in procurement processes.

A competitive process where various suppliers bid for a contract. Auctions can be forward, reverse, or Dutch, each with its own set of rules and procedures.

The use of technology to automate the procurement process. This can include everything from requisition to purchase order to payment.

An inventory valuation method where the total cost of items purchased or produced is divided by the total quantity to find an average cost.

A situation where customer orders exceed current inventory levels, requiring the business to fulfill the order when new inventory arrives.

The practice of comparing business processes and performance metrics to industry best practices to identify areas for improvement.

The process of evaluating and comparing supplier bids to select the best offer based on price, quality, and other criteria.

A comprehensive list of raw materials, components, and assemblies required to construct, manufacture, or repair a product or service.

A long-term agreement with a supplier to deliver goods or services at a predefined price, with deliveries scheduled over a period of time.

The process of managing and maintaining a product catalog, which includes product descriptions, quality, pricing, and supplier information.

The practice of ensuring that a company's actions and procedures follow external laws and internal guidelines.

Inventory that is in the possession of the retailer but still owned by the supplier until sold.

The process of managing contracts from initiation through execution, compliance, and renewal. Involves various sub-processes including negotiation, approval, and auditing.

A department or unit within an organization that incurs expenses but does not generate revenue. Used for budgeting and accounting purposes.

This is the systematic process of predicting future customer demand for a product or service. Accurate demand forecasting helps businesses prepare for various market changes and consumer demands. It is crucial for inventory management, production planning, and setting realistic sales targets.

This involves the purchase of goods and services that are directly incorporated into the products being manufactured. It's a strategic function that impacts the quality, cost, and availability of the finished product. Direct procurement contrasts with indirect procurement, which involves purchasing services and supplies required for the day-to-day operations of a business.

This is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. This model minimizes the financial risk for the store but often involves lower profit margins.

This refers to the use of internet-based systems and solutions to conduct procurement processes. E-procurement automates tasks like requisition, purchase order creation, approval workflows, and invoice matching. It aims to streamline operations, enforce compliance, and achieve cost savings.

This is a formula used to calculate the most cost-effective quantity of items to order. The EOQ model considers holding costs, demand rate, and order costs to minimize total inventory costs. It's a fundamental principle in inventory management.

This is the electronic interchange of business information using a standardized format. EDI replaces postal mail, fax, and email to connect directly to the business systems of trading partners. It's commonly used for e-commerce, supply chain management, and financial transactions.

These are long-term tangible assets that a business owns and uses in its operations to generate income. Fixed assets include buildings, machinery, and equipment. They are capitalized rather than expensed, meaning their cost is allocated over the years they are in use, rather than being allocated to any one operating period.

This is an auction where a single seller offers a product or service, and multiple buyers bid to purchase it. The price usually starts low and is driven up by competing bids. Forward auctions are commonly used for selling surplus goods, unique items, or used products.

This is a shipping term used in international trade to describe when the ownership and liability of goods get transferred from a seller to a buyer. FOB specifies at which point the seller's obligation ends and the buyer's obligation begins. It's crucial for contract management and logistics planning.

This is a software application designed to support and define import and export trade processes. It provides functionalities like compliance checks, customs management, and risk assessment. GTS is often integrated into larger enterprise resource planning (ERP) systems.

This is the process of receiving goods to verify them against the quantity and quality as per the purchase order. It's a critical step in inventory management and triggers the payment process. A goods receipt can affect both accounting and inventory data.

This is the practice of multiple businesses coming together to leverage their collective buying power to receive better terms from suppliers. It allows smaller companies to benefit from the economies of scale that larger buyers might enjoy. Group purchasing can be formalized through consortium contracts or less formal "buying groups.

This is an international nomenclature for the classification of products. It allows participating countries to classify traded goods on a common basis for customs purposes. The code is a series of numbers and letters that provide a detailed description of the product, which is useful for tax assessment and data collection.

This refers to the costs associated with storing inventory that remains unsold. These costs include warehousing, security, insurance, and more. Holding costs are often compared to ordering costs to determine the Economic Order Quantity (EOQ) for inventory management.

Although not directly a procurement term, HCM practices can impact procurement, especially in service contracts. HCM refers to practices related to people resource management such as hiring, training, payroll, and benefits administration. Effective HCM can ensure that the right personnel are involved in procurement processes, thereby affecting their success.

Short for "International Commercial Terms," these are international standard codes that define the responsibilities of sellers and buyers for the delivery of goods. They specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.

This involves the acquisition of goods and services that are not directly incorporated into the products being manufactured. These can include office supplies, cleaning services, and software subscriptions. Unlike direct procurement, indirect procurement is not a core part of business operations but is essential for day-to-day activities.

This is the process of matching vendor invoices with purchase orders and delivery receipts to verify that the goods or services were received at the agreed-upon price. It's a crucial step in accounts payable processing to ensure accurate payments and financial reporting.

This is a procurement process where a business outsources specific tasks or projects to a third-party vendor. Unlike traditional employment, job contracting is project-specific and is generally for a defined period. It allows businesses to tap into specialized skills without the long-term commitment of employment.

This is a business arrangement where two or more parties agree to pool their resources for a specific task or ongoing activity. In procurement, joint ventures can be used to secure larger contracts or to meet qualification criteria that a single company may not be able to meet.

This is an inventory management philosophy aimed at reducing in-process inventory and its associated carrying costs. The approach relies on market demand forecasting to optimize inventory levels and improve cash flow. However, it can be risky if there is a disruption in the supply chain.

These are specific and quantifiable measurements that organizations use to gauge performance over time. In procurement, KPIs could include metrics like cost savings, procurement cycle time, and supplier compliance rates. They are essential for monitoring the effectiveness of procurement strategies.

This is the process of taking multiple, separate SKU items and combining them into one package to create a new SKU. Kitting is often used in manufacturing environments to ensure that all the components needed for a production process are available simultaneously.

This involves the systematic management of an organization's information and knowledge resources. It's crucial in procurement for maintaining supplier quality, compliance records, and best practices. Effective knowledge management can lead to more informed decision-making.

This is the amount of time that elapses between when a process starts and its completion. For procurement, lead time could refer to the time between placing an order and receiving it. Shorter lead times can improve inventory turnover rates.

This is the total cost of owning an asset over its entire life, from acquisition to disposal, including operating, maintenance, and repair costs. Understanding lifecycle costing is crucial for making informed procurement decisions, especially for high-value assets.

This is a method for making procurement decisions based not just on the purchase price but also on all costs that will be incurred throughout the life of the product or service. It includes costs like maintenance, operating, and disposal costs.

This is the act of choosing between manufacturing a product in-house or purchasing it from an external supplier. This decision involves considering factors like costs, capacity, proprietary knowledge, and skill requirements.

This is a planning and decision-making tool that helps businesses decide how much and when to purchase different types of materials. It's based on the production schedule and takes into account inventory levels, lead times, and lot sizes.

This is the practice of sourcing a component, raw material, or product from multiple suppliers. It's a risk management strategy that ensures a consistent supply chain even if one supplier fails to deliver.

This is the process where the buyer and supplier discuss and agree on the terms and details of a contract. Effective negotiation can result in better prices, terms, and relationships between the parties.

These are the payment terms agreed upon between the buyer and the seller. Common net terms include net 30, which requires the buyer to make payment within 30 days of the invoice date.

This is a legal contract between at least two parties outlining the sharing of certain information for a specific purpose but restricting it from wider use or dissemination.

This is a financial metric used in retail to monitor merchandise budgeting. It's the difference between how much inventory is needed and how much is available, including orders placed but not yet received. OTB helps retailers make informed purchasing decisions.

This includes all the costs associated with placing an order for an additional batch of goods, but not the cost of the goods themselves. It can include costs like shipping, handling, and any fees or penalties associated with the order. Understanding order cost is crucial for inventory management and the Economic Order Quantity (EOQ) model.

This is the practice of hiring a third-party organization to perform services, handle operations, or provide goods that are either difficult to manage or are outside the company's expertise. Outsourcing can be a cost-effective way to handle various business functions but comes with its own set of risks and challenges.

This is the maximum price a seller is allowed to charge for a product or service. Price ceilings are often set by government regulations to protect consumers but can also be negotiated in long-term supplier contracts.

This is an integrated system that fully automates the goods and services procurement process from the initial requisition to invoice payment. It includes a range of activities like approval workflows, purchase order creation, and invoice approval.

This is a commercial document issued by a buyer to a seller, indicating the type, quantity, and agreed-upon prices for products or services. It serves as a legal offer to buy and upon acceptance by the seller, becomes a legally binding contract.

This is a way of preventing mistakes or defects in manufactured products and avoiding problems when delivering solutions or services to customers. QA is applied throughout the product lifecycle and is key for meeting both regulatory requirements and customer expectations.

This is a reduction in the cost per unit in exchange for purchasing a larger quantity. Quantity discounts aim to encourage larger orders, providing a win-win for both buyer and supplier through economies of scale.

This is a formal statement of promise by a potential supplier to supply goods or services required by a buyer, at specified prices, and within a specified period. A quote may also specify terms of sale and payment, warranties, and other related information.

This is the inventory level at which a new order should be placed to replenish stock before it runs out. Calculating the reorder point considers factors like lead time and safety stock levels.

This is a document that solicits proposals, often made through a bidding process, by an agency or company interested in the procurement of a commodity, service, or valuable asset. It outlines the bidding process and contract terms and provides guidance on how bids should be formatted and presented.

Unlike a traditional auction where buyers bid to purchase supply or services, a reverse auction has sellers competing to provide services at the lowest possible price to a buyer. It's often used for commodities and standardized services.

This is the practice of sourcing a particular product or service from only one supplier. While this can simplify supply chain management and foster strong supplier relationships, it also poses a risk if the sole supplier fails to deliver.

This is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can use its consolidated purchasing power to find the best possible values in the marketplace.

This involves the strategic segmentation of suppliers based on their importance and then managing them in a way that maximizes value for both parties. Effective SRM can lead to cost reductions, increased efficiency, and better quality.

This is a formal, structured invitation to suppliers to submit a bid to supply products or services. In the public sector, such activities are required by law to be open to bids to ensure transparency and competitiveness.

This is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system. It includes purchase price, implementation, operation, maintenance, and eventual decommissioning.

This is an inventory control system used to determine when items or materials used in production should be replenished. When items in the first bin have been depleted, an order is placed to refill or replace them. The second bin is then used while the first is replenished.

This is the cost per individual item, often used as a standard measure to compare pricing between vendors. It's crucial for evaluating bids and quotes.

In the context of supply chain management, upstream refers to the activities related to obtaining raw materials and goods from suppliers. It includes sourcing, procurement, and transportation.