Only the most important chapters summarized for the exam

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Only the most important chapters summarized for the exam Chapter 1 – The role of purchasing in the value chain Purchasing: the management of the company’s external resources in such way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company’s primary and support activities is secured under the most favorable conditions  Purchasing + supply chain management = key business drivers

1.Strategic role:

a.Analyzing the purchasing spend b.Identify key and commercial suppliers c.Develop differentiated supplier strategies

2.Tactical role:

a.Standardize purchasing processes b.Establish effective information links c.Strive for continuous improvement of supplier performance

3.Operational role:

a.Secure efficient material supply from supplier in time, right quality, quantity and lowest overall costs The role of purchasing in the value chain

Primary activities: physical transformation and handling of the final product

•Inbound logistics: receiving, storing and disseminating inputs to production process oInbound transportation oincoming inspection omaterials handling owarehousing oinventory control

•operations: transforming input into final product

omachining oassembly opackaging oequipment maintenance otesting oprinting and facility operations 2 / 3

•outbound logistics: collecting, storing and physically distributing the final product to customers ofinished goods warehousing omaterials handling ooutbound transportation oorder processing and scheduling •marketing and sales oadvertising & promotion osales odistribution ochannel selection omanagement of channel relations opricing •Services: providing services to customers to enhance or maintain value of product oInstallation orepair and maintenance oparts supply oproduct adjustment

Support activities: support primary activities

•Procurement: all activities required to get product to final destination

oconsumable items (raw material, supplies) oassets (machinery, laboratory equipment, office equipment and buildings)

•Technology development: technology embodies in every activity

oKnow-how oProcedures oTechnology embodies on process and design

•Human resource management: active in both primary and support activities

oRecruiting oHiring oTraining oCompensation of all types of personnel

•Firm infrastructure: supports entire set of of company processes

oManagement oPlanning oFinance oAccounting oLegal oGovernment affairs oQuality management oFacilities management (housing and accommodation)  all activities need to be performed in such way that the total value generated by the company, as perceived by its customers, is more than the sum of its costs

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