MIDDLE TERM

LESSON # TOPICS TIME FRAME PAGES

4 SPECIALIZATION WITHIN THE SUPPLY FUNCTION 1

 Quiz # 1 3

 Activity # 1 4

5 CHAPTER 4: SUPPLY PROCESSES AND TECHNOLOGY 5

 Activity # 2 7

6 IMPROVING PROCESS EFFICIENCY AND 8

EFFECTIVENESS

 Activity # 3 10

7 CONDUCTING AUCTION EVENTS (THREE STAGES) 11

 Quiz # 2 12

 Activity # 4 12

MIDTERM EXAMINATION OCTOBER 18- 20, 2021

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 SPECIALIZATION WITHIN THE SUPPLY FUNCTION

Specialization within the supply department allows staff to develop expertise in particular areas and
may require the creation of specialized group within the supply organizational structure. Most large
supply organization consists of four general areas of specialization.
1. Sourcing and commodity management - These personnel develop commodity strategies,
identify potential suppliers, analyse supplier capabilities, select suppliers, and determine prices,
terms, and conditions of supplier agreements. They create contracts and purchase orders.

2. Materials management - This group manages the contract after it is signed, directs the flow
of materials and services from the supplier, and keeps track of the supplier’s delivery and
quality commitments to avoid any disruptive surprises.

3. Administration - This group handles the physical preparation and routing of the formal
purchase documents, manages the department budget, keeps the necessary date required to
operate the department, and prepares reports needed by top management and supply.

4. Supply research – provide cntemporary on the theories that have been applied to the
various logistics and SCM research and provide reference materials and direction for future
research.
STRUCTURE FOR DIRECT AND INDIRECT SPEND
>Direct spend includes any good that go into the end product or services; indirect spend is
comprised of the goods and services that are needed to run the organization.it includes the purchase
such as professional services, utilities, travel, employee benefits, and office supplies.
1. ORGANIZING THE SUPPLY GROUP
>The organization structure is based on functions, products, or business process is immaterial;
what really matter is the work must be assigned and executed in accordance with strategic plans and
organizational goals. It follows logically that organizational planning and delegation are important
segments of the integration of strategies goals and organizational designs.
2. THE CHIEF PURCHASING OFFICERS “CPO”
3. >The chief purchasing officer or chief supply officer is defined as the “most senior” or “top
level” executive in a firm’s corporate office or major division, such as strategic business unit,
who has formal authority and responsibility to manage his or her firm’s purchasing, buying or
sourcing functions for the procurement of goods and services from external suppliers.
4. REPORTING RELATIONSHIP
>Reporting to one of the other top five senior executives” executive vice president, senior vice
president/ group vice president, and CFO/ vice president of finance” in the firm can provide supply
the organizational clout and exposure needed to play a significant role.
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 5. SUPPLY ACTIVITIES AND RESPONSIBILITIES
>Described as the series of activities that must be managed effectively for the organization to
deliver best value to the final customer.
6. SUPPLY TEAMS
Team brings together numbers of people, often from different functional areas, to work on a
common task. Team provides superior results compared to individual’s efforts as a result of range of
skills, knowledge, and capabilities of team member.
a. LEADING AND MANAGING TEAMS
Changing to a team – based workplace requires significant level of commitment and training of
management and individuals team members.
Supportive organizational culture, structure, and system
A common compelling purpose, measurable goals, and feedback for individuals and the team.
b. CROSS-FUNCTIONAL SUPPLY TEAMS
Consist of personnel from multiple function focused on a supply related task. Effectives cross-
functional teams save time by allowing a simultaneous, rather than a sequential, approach
7. OTHER TYPES OF SUPPLY TEAMS (6)
a. Team with supplier participation
b. Team with customer participation
c. Co-location of supply with internal customer
d. Co-location of suppliers in the buying organization
e. Supplier council
f. Supply council
• CONSORTIA
This are form of collaborative purchasing that is used by both public and private-sector
organization as a mean of delivering a wider range of services at a lower total cost.

QUIZ # 1

SPECIALIZATION WITHIN THE SUPPLY FUNCTION

Instruction:
Kindly look on with the upcoming quiz in our Messenger Group Chat or in
our Google Class.

Quiz will be in the form of google form. I will be sending you the link for the
quiz. Please be reminded that all quizzes are time bounded.

Reminder: Review before taking up your quiz.

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 ACTIVITIES # 1

Date: _____________ Score: __________

STRUCTURE FOR DIRECT AND INDIRECT SPEND

Instruction: In a long bond paper, complete the table. List down at least three (3) Pros and Cons of each
structure for direct and indirect spend.

Structure for direct and Pros Cons

indirect spend (Advantages) (Disadvantages)
1. ORGANIZING THE  
SUPPLY GROUP  
 

2. THE CHIEF  

PURCHASING OFFICERS  

“CPO”  

3. REPORTING  

RELATIONSHIP  
 

4. SUPPLY ACTIVITIES  

AND RESPONSIBILITIES  
 

5. SUPPLY TEAMS  
 
 

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 CHAPTER 4
SUPPLY PROCESSES AND TECHNOLOGY
THE SUPPLY MANAGEMENT PROCESS
A. Strategy and goal alignment
B. Ensuring process compliance
C. Information flows
1. Inward flows – Information if from
2. Outward flow - Information if from
STEPS IN THE SUPPLY PROCESS
1. Recognition of need
-First step in consumer buying behavior
and also called problem identification.
2. Description of need
- A clear understanding of the internal needs. Whether tangible goods or services.
A. Purpose and flows of requisition
REQUISITION -the document used to communicate needs internally between users
and specifies and supply management according to established internal controls.
Gate 1: Authority – Does the requisitioned have the authority to make the specified
request?
Gate 2: Internal Clarity – Need to described in a clear and unambiguous way. Uniform
description of items, goods and services needed.
Gate 3: Internal clearance – Needed items should be reviewed before ordering to the
supplier.
B. Types of requisition
a) Standard Requisition – Documents applicable most of the requisitions.
Contains the following information:
i. Date of request
ii. Number of request
iii. Originating departments.
iv. Account to be charge
v. Complete description of materials or services desired and quantity.
vi. Date needed
vii. Any special shipping or delivery instruction.
viii. Signature of the person who request.
b) Travelling Requisition- Contain a complete description of the item to be send to the
supplier.
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 1. Bill of Materials (BOM) – Items needed for a long period of time.
2. Stores/Inventory Requisition – This is the need of transfer of surplus or stocks
from one department to another department.
3. IDENTIFICATION & ANALYSIS OF POSSIBLE SOURCE OF SUPPLY.
TOOLS AVAILABLE TO COMMUNICATE WITH POTENTIAL SUPPLIERS.
Tools:
a) Request for information (RFI) – This is for gathering information of the
supplier’s goods and services.
b) Request for quotation (RFQ)– A price comparison tools for commonly used
commodity in an open and free market.
c) Request for proposal (RFP)– A detailed description of the requirements and
invites bidders to use their expertise to develop and propose one or more solutions.
d) Request for Bid (RFB) – A detailed bid specification package, sealed contract will
be awarded based on the lowest bid.
4. SUPPLIER SELECTION AND DETERMINATION OF TERMS – Analysis and selection of the
supplier lead to order placement.
5. PREPARATION AND PLACEMENT OF THE PURCHASE ORDER
All companies have purchase order form. In practice, however, all purchase is governed
by the sale agreement submitted by the seller.
a) Routing – Who made the request, time and date and the flow of information.
Sending purchase order and acknowledgement of the receiving company.
b) Blanket and Open-End purchase order – Allowing the company to order in
addition without making another purchase order.
An open-ended May remain effective for a year or until change by the company of
their orders (ex. Quantity, size, colors, delivery time, dates and specifications of orders)
6. FOLLOW-UP AND EXPEDITING-
Follow – up - Is routine order tracking to ensure the supplier can meet delivery
promise.
Expediting – Is the application of pressure on a supplier to meet original delivery
promise. Treats of cancellations of orders or loss of future business transactions may be
used.
7. RECEIPT AND INSPECTION
Receipt-Is an important material management function that concludes the
transportation shipment and collects information for material accountability.
Inspection- Comprises measuring, examining, and testing to determine whether the
materials provide in the shipment conform to the contract requirements
THE PRIME PURPOSE OF RECEIVING:
a. Confirm that the order placed has actually arrived.
b. Check that the shipment arrived in good condition.
c. Ensure the quantity ordered has been received.
d. Forward the shipment to its proper destination.

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 e. Ensure that proper documentation of the receipt is registered and accessible to
appropriate parties.

8. INVOICE CLEARING AND PAYMENT

- Invoice is a claim against the buying organization
 Aligning supply and accounts payable
 Cash discounts and late invoices
9. Maintenance of Records and Relationships.
-Update records, including supplier performance scorecards.
 Linking data to decisions
 Manage supplier relationships

ACTIVITIES # 2

Date: _____________ Score: __________

SUPPLY PROCESSES AND TECHNOLOGY

Instruction:

Activity # 2: In a long bond paper, make or design a sample of the RECEIPT and INSPECTION
FORMS.

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 IMPROVING PROCESS EFFICIENCY AND EFFECTIVENESS

Business terms often used interchangeable or in a general combination.

 Efficiency-Refers to the ability to optimize the resources and business activities to generate
revenue and profits.
 Effectiveness-Refers to the ability to optimize business strengths in the way you operate.
Efficiency is doing the things right; effectiveness is doing the right things.
STRATEGIC SPEND
-Goods or services critical to the mission of the organization.
EARLY SUPPLY AND SUPPLIER INVOLVEMENT
-Vertical collaboration between supply chain partners, such that the manufacturer tries to involve the
supplier in the product development process from a very early stage.
REDUCING THE NUMBER OF REQUISITIONS MARKED RUSH OR EMERGENCY
-Reducing the excessive number of requisitions and unexpected changes in the market conditions
Reasons for “rush”
1. Faulty inventory control
2. Poor production planning or budgeting
3. Lack of confidence in the ability of the supply department to get materials to the user by
proper time.
4. The sheer habit of making request “rush”

CORPORATE PURCHASING CARDS

-Credit cards issued to internal customers in the buying organization to purchase low-dollar-value,
high volume goods and services

SYSTEMS CONTRACTING

-Rely on the periodic billing procedures.

VENDOR OR SUPPLIER MANAGED INVENTORY (VMI/SMI)

-The supplier is responsible for maintaining the buying organizations inventory levels.

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INFORMATION SYSTEM AND THE SUPPLY PROCESS
-It includes interconnected components that collect, process, and store raw data and distribute
information to support decision making, control, and coordination within the organization. A system
used to generate the information needed to support the users in an organization.
BENEFITS OF INFORMATION SYSTEMS TECHNOLOGY
1. Cost reduction and efficiency gains –
Achieve by stream lining the supply process and
freeing up supply staff to do more value adding
work.
2. Data accessibility – Makes it easier to identify
supply problems earlier, and provide useful
information for negotiations.
3. Speedier communication – Faster
communications improves supply chain
effectiveness and efficiency, especially with
global supplier. Faster turnaround may increase
market share and lower inventories.
4. Dedicate resources to strategic issues – More resources (E.g., Staff and budgets) can be
spent on strategic supply initiatives.
5. Data Accuracy - Automation decrease errors, lower inventory cost.
6. System integration – Integration across department, suppliers, and customers can provide
accurate information's in timely basis.
7. Money Control – Enterprise can provide control over how and where money is spent.

ERP (ENTERPRISE RESOURCE PLANNING)

-refers to a type of software that contains a suite of application that integrate various functions
within the organization.

CLOUD COMPUTING AND THE SUPPLY CHAIN

-COMMON ORGANIZATION TO INSTALL NEW SOFTWARE APPLICATIONS LAYERED OVER

EXISTING LEGACY SYSTEMS.

CLOUD COMPUTING- MOVES COMPUTING FROM THE DESK TOP TO REMOTE COMPUTERS.
a. Software as a Service (SaaS)
-Application that reside in the cloud, which users are able to rent on a pay-for-use basis.
b. Platform as a Service (PaaS)
-Software development technologies that allow users to create customized processes or tools
specific for their needs
c. Infrastructure as a Service (IaaS)
-Shared server capacity that permits the sharing of computing power and storage and that can
be accessed as needed on a pay for use basis.
d. Electronic Procurement system (EPS)
-Is an application software package that allows the requisitioning, authorizing, ordering,
receiving, invoicing, and paying for goods through the internet.
e. Commodity Coding Schema
-The ability to evaluate expenditures according to any level of the hierarchy.
f. Electronic or Online Catalogs
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 -Is a digitized version of a supplier’s catalog.
Marketplaces
-Refer to an open space or square in a town where people buy and sell things.
-Refers to the activity of buying and selling products.
Extranet- Private intranet that is extended to authorized users outside the company such as
suppliers, also referred to as private marketplaces.
Intranet- Single and widely accessible
Online Reverse Auctions (ORA)
-Electronically managed auctions, typically hosted by a third party service provider or via leased
software system.
Reverse Auction-is a type of auction in which seller bids for the prices at which they are willing to
sell their goods and services.
1. Open offers auction - Supplier selected closing items, see the most competitive offers from
other supplier, and enter as many offers as they want up until a specified closing time.
2. Private offers auction – The buyer offers a target price and quantity on a selected time and
item.
3. Posted price auction – The buyer posts the acceptable price. The first supplier to meet it
gets the award.
Online Reverse auction – Is an online, real-time, dynamic and declining-price auction for goods or
services between one buying company and group of prequalified supplier.
a) Supplier use a particular software.
b) Supplier to offer the lowest bid cost will get the contract.

ACTIVITIES # 3

Date: _____________ Score: __________

IMPROVING PROCESS EFFICIENCY AND EFFECTIVENESS

Instruction: In a long bond paper, complete the table by providing necessary information needed.

Cloud Computing Give at least (2) Provide an overview of the application

apps that uses this indicated in the second column.
type of Cloud
Computing
 SaaS
 PaaS
 IaaS
 EPS
 Commodity
Coding Schema
 Electronic /
Online Catalogs
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 CONDUCTING AUCTION EVENTS (THREE STAGES)

1. PREPARATION –Delivery, the purchaser identifies appropriate supplier; set the quality, quantity,
and services requirement and length of contract.

2. EVENT – Price visibility can be handled by showing rank order, percentage, or proportional
differences. auction rules, and time of auction.

3. IMPLEMENTATION AND FOLLOW-UP – Purchaser announce the result to participants and

responds to questions. Negotiation and clarification may occur before the final contract signing.

ADVANTAGES OF ONLINE AUCTIONS

1. Convenience
2. Time and money saving
3. Compare prices
DISADVANTAGES OF ONLINE AUCTION
1. Anonymous bidder
2. Product genuineness
3. Fake websites
Implications of Supply
1. Should we be a leader or a follower?
2. What should be acquired through e-commerce?
3. What tools should we use to acquire those items?
4. Who should we use as a service provider?

POLICY AND PROCEDURE MANUAL

-Is a comprehensive text that details every aspect of company policy, the procedures for following
those policies and the forms needed to compete the process.

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 QUIZ # 4

CHAPTER 4
Instruction:
Kindly look on with the upcoming quiz in our Messenger Group Chat or in
our Google Class.

Quiz will be in the form of google form. I will be sending you the link for the
quiz. Please be reminded that all quizzes are time bounded.

Reminder: Review before taking up your quiz.

ACTIVITIES # 4

Date: _____________ Score: __________

CONDUCTING AUCTION EVENTS (THREE STAGES)

Instruction: In a long bond paper, make a scenario in any events (wedding, debut, christening and a like)
that adopts or uses the concept of conducting events.

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