L5M4 CONTRACT AND FINANCIAL - Learning Definition Business Model Formula Discussion (Advantages & Disadvantages)

outcomes
1.0 Understand and apply tools and techniques that can be used to measure and develop contract performance in procurement and supply
1.1 Assess the use of Key Performance Indicators KPI - Financial and nonfinancial Eckerson (2009) - Characteristics of effective KPIs: KPI must be SMART Advantage: 1. Motivate
(KPIs) Purpose of KPIs 1. Measure performance metrics used to reflect the Sparse, Drillable, Simple, Actionable, Owned, compliance and improvement. 2. Manage supply
improvement. 2. reward performance. 3. Justify why critical success factors of an Referenced, Correlated, Balanced, Aligned and risk. 3. Support contract management. 4. Identify
a supplier is on our supply base 4. Supplier organisation or contract. Key - Validated. Neely's Four CPs of measurements 1998 - high performing suppliers. 5. Identify closer
improvement. Critical components of supply chain CSF. Performance - State of 1. Check position. 2. Communicate Position. 3. partnership suppliers. 6. Gives feedback for
metrics 1. Translate financial objectives. 2. Translate business. Indicators - Way Confirm Priorities. 4. Compel Progress. learning and continuous improvement.
operational performance. 3. Engineer behaviour business is measured. CSF - are Disadvantages: 1. Focus is on the measured areas
that are essential for a contract only. 2. Can lead to cutting corners on quality or
or business to be successful. service to achieve targets 3. KPIs can be misaligned
with corporate objectives and 4. Can be time
consuming. 5. Risk that the wrong metrics have
been selected.

Cost Cost - Amount of money used Dolan 2004 - says that suppliers might also be rated KPIs for Cost: 1. Basic purchase price. 2. Whole
to make a product or deliver a on costs in relation to continuous improvement via life cost - benchmark. 3. Cost reduction submitted
service. (a) Supplier partnership initiatives (b) Performance by the supplier.
against cost and (c) Cost reduction recommendations
submitted by the supplier.

Quality Quality - ability to meet and SERVQUAL - A method of analysing customer KPIs for Quality 1. rejects parts per million (PPM).
exceed our customer perceptions of service quality. RATER Framework - A 2. Conformance to specification. 3. Point system
expectations through clearly framework around which SERVQUAL measures are on general performance.
defined goals. It is our belief based (Reliability, Assurance, Tangibles, Empathy and
that sustainable success as an Responsiveness). Garvin 1984 - identified five major
organisation can only be approaches to how quality is defined; 1. transcendent
achieved by constantly approach - equates quality with excellence. 2. User-
challenging ourselves in the based approach - making a product that is fit for
pursuit of excellence. purpose (Juran 2010). 3. Product-based approach -
sees quality precise and measurable. 4.
Manufacturing based approach - regards quality as
the manufacture of products that meets specs. 5.
Value based approach - develops with the
manufacturing based approach to future by
incorporating both cost and price.
Delivery Delivery -The process of Hiles business model on SLAs - Hiles (1993) defined KPIs on Delivery 1. % of OTIF. 2. % on early
delivering goods or services. an SLA as “An agreement between the provider of a delivery. 3. % on late delivery. 4. % on over
Supply chain management is service and its users, which quantifies the min. delivery. 5. % on correct paperwork. Below
concerned with the flow of quality of service which meets business needs.” service Performance - Service credits can apply.
materials and services,
including delivery to the
ultimate customer, as well as
the associated flows of money
and information. Delivery can
include: 1. Service delivery. 2.
Product delivery and 3. on-
time logistics. Rights of
delivery: 1. Right time. 2. Right
Quantity. 3. Right Place.

Safety Health & Safety - The health, The Iron Triangle - Quality, cost and time. Bubshait A safety performance KPIs on Safety 1. Audit non conformance reports.
safety and welfare of and Almohawis 1994 - noted with regards to safety Index - SPI. SPI = (LTI x C) 2. HSE reports. 3. Accident incident reports. 4.
management, employees and in relation to construction projects "the degree to divided by M. LTI - Lost Lost time as a result of accidents. 5. Industrial
contractors which the general conditions promote the Time Incidents. M - total accident rates. 6. Accidents avoided. 7. Number of
competition of a project without major accident or man hours. C - Constant reportable accidents.
injury.

Three Aspects of managing Gordon 2005 - proposed seven steps for

suppliers; 1. Analysing the development of an effective supplier performance
suppliers. 2. Measuring management system; 1. Align Supplier's performance
performance. 3. Managing the goals with organisational goals. 2. Determine an
1.2 Evaluate methods of measuring and improving supplier. Supplier evaluation approach. 3 Develop a method to collect
supply chain performance Management occurs in three information about suppliers. 4. Design and develop a
ways: 1. An integral part of an robust assessment system. 5. Deploy a supplier Measuring Supplier Performance Advantages: 1.
existing contract. 2. Part of the performance assessment system. 6. Give feedback to Identify performance problems early. 2. Drive
process of managing approved suppliers on the their performance and 7. Produce continuous improvement and 3. Praise good
supplier lists. 3. Part of the results from measuring supplier. Further Five. 1. practice and giving constructive feedback can
supplier appraisal process Increase performance visibility. 2. uncover and improve supplier relationship. Disadvantage: 1.
when an existing supplier is remove hidden waste. 3. Leverage the supply base. 4. Can be time consuming. 2. Can be costly. 3.
competing for the renewal of a Align customer and supplier businesses. 5. Mitigate Negative reporting on performance can damage
contract. risk. relationships with suppliers.
 1. Gathering feedback (internal
& external) from customers
and other s/holders. 2. Gather
Collate and analyse data performance through
observation and testing's. 3.
Budgetary control - monitor
actual costs against budgets. 4.
Formal Performance reviews or
appraisal. 5. Contract
management - continue
monitoring compliance. 6.
Meetings. 7. Project
management. 8. Consultants.
9. Technical specialists.

1. Does not have to relate to a

new innovation, but could
relate to; increased efficiency,
reduced risk improved product
design & quality and lower
costs. 2. Innovation can be
classed in three different
Measure supplier innovation against agreed matrix ways; incremental, radical and
discontinuous. 3. Innovation Innovation audits - assessment tools such as IMP3 -
can be broken down into four consists of 47 questions and helps an organisation to Supplier innovation measures that are used: 1.
key abilities; develop new understand its CSF across five management areas: 1. R&D. 2. Investment & R&D. 3. Innovations
products to satisfy existing Innovation strategy. 2. Innovation organisation and proposed/implemented. 4. Type of innovating. 5.
market needs, ability to apply culture. 3. Innovation life cycle processes. 4. enabling Expenditure on new tech. 6. Tech support. 7.
appropriate processes in factors. 5. Innovation results. Technological Design capability. 8. Invention lead time. 9.
product, ability to develop and Innovation Capabilities (TIC) has seven dimensions Product development capability and time. 10.
adopt new products and of the TIC framework: 1. Learning capability. 2. R&D Level of collaboration in cross-organisation
processes to satisfy future Capability. 3. Resource allocation capability. 4. innovating. Innovating capabilities and NPD (New
market needs and Ability to Manufacturing capability. 5. Marketing capability. 6. product development) 1. White box (Supplier has
respond to technological Organisation capability and 7. Strategic planning little involvement). 2. Grey - joint. 3. Black box.
opportunities. capability. Supply has full responsibility.

Using TTM supply chain

performance measurement -
Ares of innovation and
Measure time to market against agreed timescales learning; 1. Financial
perspective. 2. Buyer
perspective. 3. Internal TTM (Time to Market) Project initiation ------>
business perspective 4. Feasibility analysis ------> Planning and Design ------>
Innovation and learning Development and testing -------> Launch and
perspective. production --------> First revenue.
 Guiled 2006 - identified two main types of systems
integrations - 1. BIG I (where all relevant activities
are on one system and 2. Secondly, Little I - a
network of reliable interfaced systems. Wisner,
Leong & Tan's supply chain integration model; steps
Create E-Systems integration across the organisation EDI - defined as the paperless to supply chain integration; Step 1 identifies critical
and its supplier network business transaction process. supply chain partners. Steps 2 and 3 - Develop supply
B2B communication Key chain strategies. Step 4 - concerns the development
elements of a system 1. inputs. of internal process performance measures. Step 5 EDI (Electronic Data Interchange) Advantages 1.
2. Transformation processes. 3. and 6 - are about improving internal processes and Reduction in cycle. 2. Increase in transaction
Outputs 4. Feedback. Levels of measures. Step 7 & 8 Improving external processes. visibility. 3 Improvement in tracing and tracking
integration: Stage 1: Step 9 is to annually re evaluate the model to ensure materials and products. 4. Reduction in no of
Fragmented integrally. 2. Some changes can be made. Bowersox, Closs and Cooper errors. 5. Reduction in transaction cost. 6. Increase
internal integration Stage 3 Full 2002 - 8 key processes for supply chain integration: in speed of payments and 7. Improvement in
internal integration. stage 4 1. Customer relationship Management (CRM). 2. customer service. Disadvantages 1. Initial cost can
Fully integrated supply chain. Customer service management. 3 Demand be expensive. 2. Training and educating staff is
Integration process involves: management. 4. Order fulfilment. 5. Manufacturing required - may incur a cost. 3. High volume of
1. Preparation, Active internal Flow management. 6. Supplier relationship transactions may be required to justify the
integration and Active external management. 7. Product development and expenditure. 4. Lack of EDI standards. 5. Data
integration. commercialisation. 8. returns management. security.
Return on Investment
Cost and benefits of investments measurement 1. ROI. 2. Payback and 3. NPV (ROI) = Net Profit / total
(Net Present Value) invested capital x 100

Supplier Evaluation Quantitative measure: 1. KPS

are easier to establish. 2. Easier to monitor over
time. 3. Measures focus one efficiency. 4.
Particularly suited to the purchase of products. 5.
Ensure a balance between qualitative and Examples include; delivery performance, price
quantitative measures of performance reject rates. Supplier Evaluation Qualitative
measure 1. KPS are likely to be subjective. 2.
Monitoring over time is subjective 3. Measures
focus on effectiveness. 4. Suitable for purchase of
services. 5. Examples include; staff issues,
management capability, level of technology
development. Balance scores - two types 1.
Lagging measures - financial outcomes. 2. Leading
Supplier quantitative and measures - non financial. Included in the balance
qualitative measures. Balance scorecard: 1. A balance of measures. 2. Hard and
Scorecards. soft measures. 3. Lagging and leading indicators.
 Advantages 1. Encourages managers to focus on
both generated profits and the investment
required. 2. ROI produces one sing measurement.
3. ROI can be used to evaluate the relative
performance of other investments centres and
Measure return on investment companies. Issues 1. ROI calculations can be easily
manipulated. 2. It is difficult to measure many
ROI - expressed as a ratio or investment benefits as they may be qualitative 3.
percentage. ROI is at a Benefits may be affected by other investments and
organisation, departmental can be difficult to separate out. Disadvantages 1.
and project level. It is a many methods to calculation ROI. 2. Over simplify
measure of the relationship a complex decision. 3. Purchasing New assets will
between an organisation's increase the amount of capital investment and this
profit and the investment in will affect ROI. This may delay new investment. 4.
assets it makes to generate Different account policies can make comparisons
those profit. difficult.
LO1 1.3

Krause et all 2007: Methods for supplier

development; (1) Competitive pressure. 2. Evaluation
and certification systems 3. Incentives 4. Direct
involvement. Handfield et all 2000: 1. Identify critical
commodities for development. 2. Identify critical
suppliers for development. 3. Form cross-functional
commodity team. 4. Initiative communication with
suppliers management. 5. Provide Joint resources. 6.
Develop agreements. 7. Identify opportunities and
probability for improvements. 8. Identify critical
Supplier Development Process performance areas . 9. reward and recognition. 10.
1.3 Examine approaches available for supplier - three steps: 1. Prepare. 2. Systematically institute ongoing continuous
development Develop and 3. Monitor improvements.

Development of knowledge:
Data ----> Information ---->
Knowledge. Transfer in supply
chains - Technology transfer
takes many forms: 1.
Machinery acquisition. 2. Major barriers to knowledge transfer include: 1.
Technology Licensing 3. Kotabe, Martinand Domoto 2003: suggest Supplier's inability to absorb the info. 2. Supplier's
Intellectual property licensing knowledge transfer takes two forms: 1. Simple lack of receptivity or motivation 3. Buyer's lack of
4. Know-how and technical technical exchanges 2. Technology transfer credibility when delivering the knowledge. 4. Poor
Knowledge and technology transfer services and 5. Training. associated with higher-level capabilities. buyer/supplier relationship 5. Causal Ambiguity
 Advantages of early supplier involvement: 1.
Reduced product development cost. 2. Improved
performance 3. Higher return on R&D investment.
4. Faster product development. 5. Lower risk. 6.
Greater flexibility and 7. Access to product
development capabilities of the
Stages in NPD (New Product supplier/knowledge of the buyer. ESI/CPD brings
Development) process: 1. on Risks: 1. Sharing of skills, etc. may form the
Concept generation. 2. basis of organisation's competitiveness. 2.
Concept screening. 3. Financial and time costs 3. Loss of direct control. 4.
Preliminary design. 4. Design, Poor communication within organisations -
evaluation and improvement. incompatible systems. 5. Trust issues, (see page
Collaborative product/service development 5. Prototyping and final Design. White, Grey or Black box (supplier involvement) 55)

Supplier development review:

1. Meeting targets. 2. Identify
areas for support. 3. Processes.
4. Improvement activities. 5.
Continuous improvement
responsibilities: a. Establishing
processes to align continuous
improvement. b. focusing on
manufacturing process Supplier's performance can be summarised in six
approaches. c. VSM (Value steps: 1. Analyse the supplier's current situation
stream mapping d. improving and performance level. 2. Identify failure to meet
commodity manufacturing performance targets. 3. Develop improvement
process capability. e. reducing plan. 4. Implement improvement plan. 5. Measure
scrap. f. Six Sigma projects and level of improved performance. 6. Repeat the cycle
Continuous improvement reviews and strategies 7. Lean implementation Plan, Do, Check & Act to ensure continuous improvement.
 Sarkar and Mohapatra 2006: (performance
capability matrix): Includes Lysons and Farrington,
Monczka et al and Carter's models. Capability factors
and Performance factors. Lyson and Farrington: 1.
Finance. 2. Insurance. 3. Productive capacity and
Technical road map: 1. Where facilities or service support. 4. Quality. 5. Health &
we want to go. 2. Where are Safety. 6. Environmental management. 7. Existing
we now and 3. How can we get contracts held; performance. 8. Organisational
there? Technology road maps structure key personnel (resources). 9. Sub
& Supplier development: Contracting & Procurement capability and 10. Supply
Questions to consider when chain management. Monczka et all 1. Cost & Price. 2.
selecting a supplier for a joint Quality and Delivery. 3. Management capability. 4.
development of anew product: Total quality performance. 5. Cost structure. 6.
a. which suppliers should be Employee capabilities. 7. Systems and philosophy. 8.
included? b. Can the supplier Process and technology 9. Sustainability and
meet the requirements? c. environment 10. Financial stability. 11. Production
Does the supplier's technology scheduling. 12. Control systems. 13. E-commerce and
road map align with our map? 14. Supplier sourcing strategies, policies and
d. to what extent should the techniques. Carter's 10 C's 1. Competency. 2.
supplier be involved in the Capacity. 3. Consistency. 4. Commitments to quality.
project? e. At what stage 5. Cash and Finance. 6. Control of processes. 7.
should the supplier be involved Culture and r/ships. 8. Communication 9. CSR. 10.
Supplier capability assessment in the project? Cost and Cost management.
 3D printing - benefits include: a. cost savings. 2.
Information Technology: 1. EDI reduction of waste and 3. reduced carbon
(electronic data interchange. 2. footprint. 4. Improved time to market. Benefits of
Barcodes 3. radio frequency ERP: 1. Time Savings. 2. Transparency 3.
identification (RFID) and 4. The communication. Cloud computing & Cloud-based
internet. Collaborative management advantages: 1. Communication. 2.
planning, forecasting and Coordination 3. Collaboration 4. Cost control 5.
replenishments. Four key Competitive advantage. Extranets is formed by
collaborative activities to extending the intranet beyond a company to its
improve supply chain Jacobs 2007: categories technologies used in customers - Advantages. 1. Improved supply chain
performance 1. Strategy and manufacturing as hardware systems and software integration. 2. reduced operational costs. 3.
planning. 2. Demand and systems: Hardware 1. numerical controlled Improved collaboration and relationship potential
supply management 3. machines. 2. Machining centres. 3. industrial robots between users. 4. Authorised business information
Execution and 4. Analysis. CPFR and 4. automated materials handling (AMH) systems can be directly accessed by suppliers. 5. A single
solutions include 1. Forecasts including AGV (Automated guided vehicle) systems. user interface is shared between business partners
and historical data sharing. 2. Software 1. computed aided design (CAD). 2. and 6. Improved communication security.
Automation of the Computer aided Process planning (CAPP) and 3. Challenges in technology 1. Implementing a new
collaboration arrangement and Computer aided Manufacturing (CAM). AT Kearney technology can be disruptive. 2. You have to
joint business plan. 3. 2013: Technology is used in supply chains: 1. demonstrate the benefits and return on
Evaluation of exception Tracking goods. 2. Transaction processing. 3. investments. 3. Change management is a big part
conditions. 4. The enabling of Planning support. 4. Decision support and 5. of it. 4. Need to sort data from old system to new
Identify opportunities to use technology revision and commentary. Automation in handling and across operations. system.
LO1 1.4
1.4 Assess innovative measures to improve the
supply chain
 Cross function team Design
team, Sourcing team,
operations logistics teams and
Customer. Steps to a
successful application of cross
function teams: 1. Select a
task. 2. Select team members.
3. Train team members. 4.
Authorise or prohibit certain
actions and responsibilities of
the team. 4. Conduct
performance reviews and
reward team members.
Successful application could
also include: 1 cross function
perspective needs to be Advances of Cross functional teams: 1. Can be
extended to inter-organisation. effective across many different settings in the
2. Team members need to supply chain. 2. cross functional team realise
have a broad business synergies by combining individuals and functions.
perspective, experience and 3. Time compression - rather than operating with a
skills. 3. Must have strong team Lyons and Farrington A cross-functional team refers complex sequential process, the cross functional
building ability. 4. Goals must to group of individuals from various organisational team approach is much simpler and reduces time.
be clearly understood. 5. functions who are brought together to achieve clear, Disadvantages 1. High requirements and
Adequate resources must be worthwhile and competing goals that could not be expectations of the people involved. 2. Process
Cross-functional working available. reached without the team....(Page 72) loss risk. 3. Groupthink

Simultaneous engineering
attempts to optimise the
design of the product and
manufacturing process to
achieve reduced lead times
and improved quality and cost
by the integration of design
and manufacturing activities
and by maximising parallelism I
working practises - 1990 The
over the wall approach Design
Stage ....... Production Stage. Traditional Sequential development 1. Idea Advantages: 1. getting products to market in a
Seven steps to implement generation 2. Business technical assessment 3. shorter time. 2. Incorporating more features or
simultaneous engineering: 1. Concept development 4. Detailed design 5. Prototype variety into product at less cost. 3 Producing more
Develop a strategy. 2. Assess. and 6. Introduction/launch. Manuela Rata 2011 New new products more often. Disadvantages 1. Lack
3. Create a culture. 4. Prioritise structures and processes are required: 1. New of in-house expertise. 2. Lack of training 3. Lack of
improvements. 5. Plan the product development teams. 2. Concurrent work management support. 4. Lack of communication.
change.6. Implement and 7. flow. 3. Early involvement. Principle of simultaneous 5. Inadequate reward system. 6. Improper
Simultaneous engineering Support. engineering People, Process and Technology & Tools. company culture.
 Advantages: 1. Reduced development cost. 2.
Reduced lead times, faster time to market. 3.
Hadfield et al - none to black box. Van Bechtel 2004 Improved product functionality, features and
Early Supplier Involvement short term benefits of ESI 1. Better production quality. technology and 4. reduced production costs. also
(ESI). Fundamental to the 2. Lower production costs. 3. Shorter development see Bechtel model. Disadvantages 1. May find it
success of ESI - three factors: clue. 4. Lower development costs. Long term benefits difficult to manage the processes. 2. Risk of loss of
1. Supplier selection. 2. of ESI 1. more efficient and effective future control of the process or design. 3. Risk can be high
Infernal capabilities of the collaboration. 2. Alignment of technology strategies. if the buyer relies on a sole supplier. 4. Increased
buyer. 3. Supplier relationship 3. Improved access to supplier's technologies and 4. A dependency. 5. Deceased flexibly and 6. loss of
Early supplier involvement development. contribution to product differentiation. information.

Hines et al - aims and objectives of Kyoryoku Kai 1.

Improve abliites and skills of suppliers in terms of a.
JIT. b. TQM c. Statistical process control d. Value
analysis/value engineering e. Computer-aided design
f. Management flexibiliy and g. Cost reduction. 2.
Produce a uniform supply system. 3. Facilitate the
flow of information and strategy. 4. Increase turst. 5.
Keep suppliers and buyers in touch with market
Kyoryoku Kai - Japanese term developments. 6. Enhance the reputaiton of the
for a supplier association or co- buyer, etc (Page 83). Izushi and Morgan 1998 -
operative association. problems with suppier associations 1. Associations
However, Toyota use the name can be more talking about techniques than
Kyohokai. Purpose of Suplier implentation and can simply become a talking shop.
associations 1. Devolve 2. Do it your self approach. 3. The association can
strategy and policy through the loses momentum. 4. In activity can result from lack of
chain 2. Strengthen trust and management. Six steps to over come these problems
relationships 3. Share 1. One ot one assitance. 2. Leadership and openness
knoweldge and experitise 4. of the buyer. 3. Uses of expertise from emver
Facilitate joint development suppliers. 4. Measureble goals and regular check ups.
and learning. 5. Jointly identify 5. Selection of members conductive to collaboration.
Supplier forums and associations ways of minimising waste. 6. Internal consensus and training.
 CIPS L5M4 - Advanced Contract and Financial Management - Key Definitions CIPS L5M4 - Advanced Contract and Financial Management - Key Definitions
LO Definition Description LO Business Model/Theorist Description
On KPI@s - characteristics on effective KPIs: Sparse,
Measurements of organisational performance using
1 Cost-Based Metrics 1.1 Eckerson (2009) Drilliable, Simple, Actionable, Owned, Referenced,
cost.
Correlated, Balanced, Aligned and Validated.

Those areas that are essential for a contract to be KPIs in performance measurements as per Neely’s
1 Critical Success Factor (CSF) 1.1 Four CPs of measurements 1998: 1. Check position. 2.
successful.
Communicate Position. 3. Confirm Priorities. 4. Compel
Neely’s Four CPs of measurements 1998 Progress.
This is so via: 1. Supplier partnership initiatives. 2.
Performance against cost reduction targets
The health, safety and welfare of management, Dolan, 2004 regarding continuous
1.1 Health & Safety 1.1 3. Cost reduction recommendations submitted by the
employees and contractors improvements relating to cost
supplier.

1. transcendent approach. 2. user-based approach. 3.

The actual cost at a past point in time when the KPI Garvin (1984) identified five major
1.1 Historic Cost Baseline 1.1 product-based approach. 4. manufacturing-based
was first established approaches to how quality is defined;
approach. 5. value based approach.

Hiles (1993) defined an SLA as “An agreement

Financial and nonfinancial metrics used to reflect
between the provider of a service and its users, which
1.1 Key Performance Indicators (KPI) the critical success factors of an organisation or 1.1
quantifies the min. quality of service which meets
contract.
business needs.”
Hiles (1993) defined an SLA
1.1 Lost time incidents (LTI) The number of lost time incidents to date
The view that quality of a product that precisely
1.1 Manufacturing-Based Approach
meets specifications
1.1 Metrics A measure of how well a project is performing
On-time Delivery In Full = the percentage of orders
that are shipped on time and in full, meaning the
1.1 OTIF
customer gets everything they ordered, on the day
they expected to receive it.
1.1 Product-Based Approach The view that quality is precise and measurable
A framework around which the SERVQUAL
1.1 RATER Framework measures are based (Reliability, Assurance,
Tangibles, Empathy and Responsiveness)
A calculation based on time lost and total man-
1.1 Safety Performance Index (SPI)
hours worked.
A management tool used to address, improve, and
communicate supply chain management decisions
1.1 SCOR
within a company and with suppliers and customers
of a company.
 Compensation given by a supplier to a buyer when
1.1 Service Credits
service fails below the required level.
A method of analysing customer perceptions of
1.1 SERVQUAL
service quality.
A contractual document, which sets out the
1.1 SLA (Service Level Agreement) expected service level and service credit regime in a
contract for services
Specific, Measurable, Achievable, Relevant and
1.1 SMART
Time bound.

1.1 Supplier Rating Measuring the performance of an existing supplier.

Reports used to track a suppliers achievement of, or

1.1 Supplier Scorecard progress towards targets or goals, which can include
quantitative and qualitative data.
An estimate used to help buyers to determine the
1.1 Total Cost of Ownership (TCO) costs, both direct and indirect, of a product or a
service.
1.1 Transcendent Approach The view that equates quality with excellence
the making of a product that is fit for purpose and
1.1 User-Based Approach
use
A description of the set of processes and activities
1.1 Value Chain that add value to raw materials in order to turn
them into a viable product to sell to customers.
A development of the manufacturing-based
1.1 Value-Based Approach
approach that incorporates both cost and price.
The total cost of an asset over its whole life,
including, for example, its purchase price and costs
1.1 Whole-Life Cost
relating to servicing repairs, consumables, disposal
and other end of life costs