The EP TLA Task ForceBritish playwright George Bernard Shaw oncereferred to America and Britain as “two countriesseparated by a common language.” But English is generallya second or even third language with the internationalbusiness community where the chances of misunder-standing each other increase with the square of newexpressions introduced in any industry jargon. Within the
The strange wordsof purchasing
Annual procurement plan.
Advance purchasing request. Publicrequest for quote/proposal (Rfx) fornew products or services not yet inproduction (see PCR).
Matches buyers and sellers in any mar-ketplace (or exchange) to transact inany quantity at any time. Allows usersto submit a request for goods andservices to be bid on by suppliers.
Best alternative to negotiatedagreement. Batna is often referred toas the lowest acceptable level for abuyer in a negotiation.
Another term for reverse auctions.
Blanket purchase agreement. A pro-curement vehicle that allows buyersto purchase goods or services at apre-negotiated price with pre-
purchasing profession, for example, even basic terms likeprocurement and purchasing mean different things eitherside of the Atlantic. So don’t be distressed if you comeacross expressions or TLAs (three-letter acronyms) thatyou don’t understand. Look to the list below or ask yourcolleagues – though they probably won’t have a clue,either. This glossary will be continually updated on ourwebsite. Don’t hesitate to e-mail us your own ndings.
negotiated terms. BPAs are usuallyannualized contracts.
A pervasive supply chain problemwhereby order variability grows asdemand signals propagate upstream.Essentially, demand spikes as ordersow back from retailer to distributorto original equipment manufacturersto tier one suppliers, and so on.
Balanced scorecard. A variant isX-BSC, cross-balanced scorecard.
A price-centric auction where buyerslist what they are interested in purcha-sing and sellers enter competing bids.
The time difference between themonetary expenditure for raw anddirect materials and supplies, and thereceipt of payment from the customerfor nished goods. e-commercesoftware companies often claim toreduce cash-to-cash cycle times.
Contract electronic manufacturer.
The use of Web-based software forthe purpose of sharing informationbetween businesses or organizations.Design collaboration, for example, al-lows engineers at different companiesto share plans and data in real time.
B2B systems that enable companiesto interactively share data, developplans and create products online.
Online materials including publica-tions and catalog data.
Sometimes called “knowledgemanagement”, content managementis a term often used to refer to theprocess of handling informationpresented in either buy- or sell-sidecatalogs, including part numbers,
descriptions and unit sizes. It also re-fers to the process of capturing, storing,sorting, codifying, integrating, updatingand protecting any and information.
Collaborative planning, forecastingand replenishment. A type of soft-ware system that enablesbusinesses to interactively shareproduction, inventory and order in-formation online with their partners.
Customer relationship management.The use of Web-based software toanalyze customer behavior. CRMsystems generally store customerinformation that is aggregated fromsales calls, purchases and customerservice centers.
Consumption and specicationmanagement. CSM is the assess-ment of internal demand for externalgoods and services to identify under-lying cost drivers, align purchaseswith business needs, and eliminateunnecessary consumption.
Corporate social responsibility.
Collective expression for membersof the executive leadership team:CEO (Chief executive ofcer), CFO(Chief Financial ofcer), COO (ChiefOperations Ofcer), CIO (ChiefInformation Ofcer), CMO (ChiefMarketing Ofcer), CPO (ChiefProcurement Ofcer) and so on.
Goods or services that are partof the production process.
Commerce with no set price. Thisis the big promise of B2B for more
efcient pricing. Examples can befound in auctions and reverse auctions.
Enterprise application integration.Generally refers to the ability toshare information between softwaresystems at different companies,specically transmitting data.
Electronic data interchange. Thetransmission of trade documentselectronically using standardizedformatting.
A common e-business buzzword,end-to-end refers to a streamlined,seamless and real-time ow ofinformation and linkages across avalue chain.
Efcient Purchasing magazine
The act of acquiring/procuring/purchasing via an electronic format.
Enterprise resource planning. A setof applications that automate humanresources and nances as well ashandles tasks such as order proces-sing and production scheduling.For example, orders can be entereddirectly into a company’s planningsystem, for example, and manufac-turing is automatically coordinated.
Web-based execution of the sourcingprocess for goods and services.
Also known as an e-marketplace. AWeb site for buying and selling goodsand services, usually via auctions.
Financial management and accoun-tability.
Fulllment service provider. An orga-nization that manages and executespart or all of a company’s fulllmentprocess, using its own assets andresources.
In the world of e-business, fulllmentrefers to the process of shippingan order to a customer, and theautomation of that process.
An e-marketplace that facilitatestransactions for goods and servicesacross several industries.
An organization that installs andmaintains software on behalf of aseparate organization.
Goods or services that are not part ofthe production process.
An exchange run by several compa-nies within the same industry, that areattempting to streamline the supplychain and aggregate buying power.Typically, members of the consortiumare rivals in the “old economy.”Covisint, for example, comprisesGeneral Motors, Ford and Daimler-Chrysler. According to Federal TradeCommission anti-trust laws, industryconsortia must not discriminateagainst qualied participants.
Initial public offering. Also internatio-nal purchasing ofce.
Just-in-time inventory. An inventorysystem model based on the idea thatdemand and supply channels can becoordinated to the point that desireditems arrive just in time for use, therebysignicantly reducing inventory levels.
Key performance indicator.
Low-cost country sourcing.
Lead logistics provider. An organizationthat manages a full scope of logisticsservices for a company by aggregatingand coordinating the services of multi-ple logistics service providers.
The processes involved in transfer-ring goods through manufacture,storage and transportation to busi-ness customers and end consumers.
Logistics visibility provider
An Internet-based service that provi-des integration to and captures datafrom logistics service providers;cleanses, veries and analyzes thedata; and reports on logistics activitiesto facilitate supply chain visibility.
Any company or employee purchasethat does not meet a company’spurchasing policy. This includesusing off-contract methods of procu-rement and non-authorized purcha-ses. Also called rogue purchasing.
Maintenance, repair and operations.MRO products are goods and ser-vices purchased by a company thatare not used in production or offeredfor resale. Typical MRO purchasesinclude manufacturing supplies,computers and ofce supplies.
Master service agreement.
An exchange run by a company thatclaims to have no vested interest inan industry.
Original equipment manufacturers.
These systems obtain informationabout a specic customer order asit happens. The software aggregatesand evaluates customer orders andcalculates how much of what pro-duct should be made in the future.
Off the shelf products
Peer-to-peer: Electronic le swap-ping systems that allow users toshare les, computing capabilities,networks, bandwidth and storage.
Purchasing change request. RFx foran existing service or product for apotential renegotiation with currentsupplier.
Purchasing productivity tracking.
An exchange run by a single entity/company.
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