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The Procurement and Supply Manager's Desk Reference, Second Edition + Website


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Table of Contents

Preface to the Second Edition xi Acknowledgments xiii CHAPTER 1 Procurement and Best Business Practices 1 Understanding Procurement 1 Understanding and Conveying Requirements 2 Creating Strategic Plans and Tactics 4 Finding Innovative Methods and Exploring Alternatives 5 Providing Procurement Services 6 Accepting Orders 7 Placing Orders 10 Mastering Procurement and Business Tactics 13 Budgets and Expense Allocation 13 Internal Control Systems 14 Establishing Procurement Methods 15 Internal Cost-Related Analysis Tools 18 Keeping Supplier Information 22 Summary 23 CHAPTER 2 Sourcing Management 25 Establishing Requirements 25 Creating and Organizing Requirements 25 Developing Specifications and Formats 27 Statement of Work 31 Terms and Conditions 32 Specification Traps 32 Locating and Developing Sources of Supply 33 Types of Competition 36 Locating Suitable Suppliers 37 Market Analysis: Determining Changing Marketplace Factors 39 Obtaining Bids and Proposals 41 Bidding Guidelines 41 Formulating the Bid or Proposal Type 42 Managing Sourcing Data 45 Categories of Existing Sources 45 Maintaining Sourcing Lists 47 The Strategic Sourcing Plan 47 Operational Sourcing Strategy 54 Summary 57 CHAPTER 3 Solicitation of Bids and Proposals 59 Solicitation Planning 59 Solicitation Methods 66 Summary 68 CHAPTER 4 Supplier Selection Criteria 69 Selecting the Supplier and Awarding the Contract 69 Operational Measures and Measures of Efficiency 75 Applying Selection Criteria 77 Administering the Contract 86 Summary 87 Note 88 CHAPTER 5 Contracts and the Legal Aspects of Procurement 89 Contract Essentials 89 Contract Requirements 91 Contract Types 92 Other Contract Types 98 Methods of Exchange 99 Other Contract Elements 100 Legal Authority and the Buyers? Responsibilities 101 Reviewing Contracts for Legal Requirements 103 Aligning Contracts and Practices with Policy 105 Maintaining Procurement Documents and Records 107 Summary 108 CHAPTER 6 Supplier Diversity 109 Diversity Programs 110 U.S. Small Business Support 112 The U.S. Small Business Administration (SBA) 112 Contracting 113 The Business Case for Diversity 115 Supplier Diversity Best Practices 116 Global Supplier Diversity 118 Diversity Advocacy Organizations 119 Summary 123 CHAPTER 7 Risk Management 125 The Nature of Risk 125 Why Is Understanding Risk Important? 125 Risk Management Principles 126 Resources for Additional Information 134 Summary 136 CHAPTER 8 Sustainability 137 Issues in Sustainability 137 Guidelines 146 Lean Six Sigma 149 Criteria for Supplier Evaluation 150 Institute for Supply Management?s Principles of Sustainability and Social Responsibility 151 Examples of Corporate Sustainability Efforts 152 Summary 154 Notes 154 CHAPTER 9 Negotiation 155 Assessing the Negotiating Environment 155 Gathering Information and Analysis 158 Preparing for the Negotiation 161 Conducting the Negotiation 167 Summary 172 CHAPTER 10 Contract Formation and Administration for Optimum Supplier Performance 173 Managing Contract Compliance 173 Tracking and Expediting Deliveries 179 Handling Supplier-Related Deviations 181 Summary 188 CHAPTER 11 Project Management 189 The Five Project Management Processes 189 Stage One: Initiating a Project 191 Stage Two: Project Planning 193 Stage Three: Project Execution 199 Stage Four: Project Controlling 203 Stage Five: Project Closeout 206 A Key Knowledge Area: Project Procurement Management 207 Using a Matrix Model for Project Staffing 210 Summary 212 Notes 212 CHAPTER 12 Quality 215 Managing Quality Performance 215 Ensuring Quality Performance 220 Summary 226 CHAPTER 13 The Procurement Function?s Internal Relationships 227 Understanding Key Departmental Roles 227 Developing Good Working Relationships 233 Participating in Cross-Functional Operations 237 Reengineering Supply Management 240 Summary 245 CHAPTER 14 Supplier Relationship Management (SRM) 247 Managing Productive Supplier Relationships 247 Developing Continuous Improvement 254 Pricing Factors and Supply 257 Representing the Organization 261 Summary 265 Note 265 CHAPTER 15 Leveraging Computer Systems 267 Using Basic Information Technology Processes 268 Using Software for Procurement 271 Sourcing Supply Management Tools 279 Summary 281 CHAPTER 16 Financial Decisions for Sourcing 283 Performing Make-or-Buy Analysis 283 Performing Lease-or-Buy Analysis 288 Formulating Financial Strategies 291 Summary 296 CHAPTER 17 Source to Settle 297 Why Source to Settle? 297 Implementing an S2S Process 303 Managing the S2S Process 307 Outsourcing the S2S Process 308 Summary 309 CHAPTER 18 Material Management and Supply Operations 311 Inventory Control and Management Systems 311 Physical Management and Inventory Accounting 321 Disposition of Surplus Assets 323 Summary 326 CHAPTER 19 Logistics 327 The Logistics Process 327 Modes of Transportation 332 Traffic Management 335 Customs 336 Logistics in the Context of International Trade 339 Supplemental Information 345 Links 347 Summary 348 Notes 349 CHAPTER 20 Regulatory Compliance 351 Regulatory Factors Governing Procurement 351 Government Organizations and Roles, Regulations, and Controls 358 Tax Laws 363 FASB 364 Conformance to Law 364 Preventing Workplace Discrimination and Harassment 364 Summary 368 Note 368 About the Authors 369 About the Website 371 Index 373

About the Author

FRED SOLLISH, MS, C.P.M. (San Francisco, CA), is theManaging Director of eParagon, LLC, a consulting firm specializingin providing training and working tools for the supply chainmanagement profession. He is a working professional in supply chainmanagement and procurement with over 30 years' experience as amanager. Fred is former president and CEO of the Institute forSupply Management (ISM) Silicon Valley affiliate. He is also aninstructor for sourcing and procurement related courses. JOHN SEMANIK, MBA, C.P.M. (San Jose, CA), is cofounderand Director of eParagon, LLC. He has served in senior corporatesupply chain positions at leading-edge companies such asHewlett-Packard and Sun Microsystems. He is the former ManagingDirector and instructor for San Jose State University'sProfessional Development curriculum in Supply Chain Management andPurchasing, and former CEO of the Institute for Supply Management(ISM) Silicon Valley affiliate.

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