Introduces the critical function in Supply Chain Management (SCM) known as purchasing. Covers purchasing decisions, strategies, procedures, supplier selections, and negotiations. Upon successful completion of this course, students should be able to demonstrate competency in the following areas of SCM: purchasing strategies, legal aspects of purchasing, material management, just-in-time (lean) purchasing, procurement, strategic outsourcing, global sourcing, total quality management, cost and price determination, and bargaining and negotiations.
Goals, Topics, and Objectives
To understand the integration and applications of purchasing within the supply chain. In today's global economy, students must possess analytical, technical, and negotiation skills in order to manage the transformation of raw materials and components into finished goods. Course topics included purchasing strategies and procedures, selection of suppliers, outsourcing, negotiation strategies, pricing and cost analysis.
- Purchasing and the Supply Chain
- Explain the role of purchasing in the supply chain.
- Outline how purchasing contributes to the firm's profitability.
- Identify the important elements of the strategic planning process.
- Legal Aspects of Purchasing
- Describe the purchasing manager's legal authority.
- Explain how contracts and purchase orders are executed.
- Discuss the importance of ethics in purchasing.
- Materials Management
- Identify the activities of material management.
- Discuss the relationship between purchasing and material management.
- Inventory Management
- Identify the primary reasons for holding inventory.
- Describe the ABC analysis and the Economic Order Quantity (EOQ) model.
- Explain the differences between fixed-order quantity and variable-order inventory systems.
- Lean Purchasing
- Describe lean production systems, Just-In-Time (JIT) inventory, and Material Requirements Planning (MRP).
- Discuss the relationship between JIT and purchasing.
- Identify the critical JIT purchasing advantages and disadvantages.
- Purchasing Procedures
- Discuss the steps in the purchasing cycle.
- Identify the main activities in a typical purchasing department.
- Define routine versus non-routine purchasing and buying methods.
- Supplier Selection and Evaluation
- Identify the qualifications of a good supplier.
- Describe the key elements of the make-versus-buy decision.
- Explain appropriate supplier techniques.
- Outsourcing
- Define outsourcing and list the advantages, and disadvantages of outsourcing.
- Identify the hidden costs of outsourcing.
- Explain the difference between core and noncore competencies.
- Global Sourcing
- Discuss the factors and variables of global sourcing.
- Describe how total costs are determined.
- Identify the quantitative and qualitative aspects of global souring.
- Analyze global sourcing alternatives.
- Supply Chain Partnerships
- Describe the elements of supply chain partners.
- Identify the benefits and risks of supplier partnerships.
- Define the buyer-supplier factors to achieve a successful partnership.
- Total Quality Management and Purchasing
- Identify purchasing's function within an overall quality assurance program.
- Define total quality management (TQM).
- Discuss the advantages of Six Sigma implementation.
- Price Determination
- Discuss the relationship between cost and price.
- Explain various pricing methods.
- Describe how price/cost analysis is used for the negotiation process.
- Bargaining and Negotiations
- Describe the differences between bargaining and negotiations.
- Explain the six psychological factors that affect bargaining, and identify the elements of negotiations.
- Discuss the implementation of a bargaining strategy.
Assessment and Requirements
All assessment of student achievement is left to the discretion of the individual instructor.
Required course materials on file in department office.
Outcomes
Credit for Prior College-Level Learning
Assessment tool on file with department.