After completing this module, you:

0.1: Know what supply chains are and what supply chain management is;

0.2: Are familiar with the influence of organizational context on the functioning of the supply chain;

0.3: Are able to do calculations related to supply chain performance;

0.4: Can explain the importance of the purchasing and supply function;

0.5: Are capable of using the Supply Positioning Model and explaining the different types of relationships that buyers want to build with their suppliers;

0.6: Have learned about relevant financial supply chain issues including financing techniques and the role of purchasing and supply in budgeting


1.1 Serving the customer

1.1.1 Quality

1.1.2 Availability

1.1.3 Customer service and responsiveness

1.1.4 Costs

1.2 The private sector context

1.2.1 Small and medium sized enterprises

1.2.2 Large enterprises

1.3 The Public sector context

1.3.1 Central government ministries and departments

1.3.2 Decentralised provincial and municipal governments

1.3.3 Autonomous or semi-autonomous public sector bodies

1.3.4 How the public sector functions

1.3.5 Key differences between the public and the private sector

1.4 Development of the supply chain

Learning check


2.1 Corporate strategy

2.1.1 Choose products/services to sell

2.1.2 Make or buy

2.1.3 Choose markets

2.1.4 Set conditions of products/services

2.1.5 Enter markets

2.1.6 Be cost-effective

2.1.7 Shift from order qualifiers to order winners

2.2 Levels of management and decision-making

2.3 Operations strategy

2.3.1 Operations objectives

2.3.2 Trade-offs between key competencies

2.3.3 Productivity

2.3.4 The balanced scorecard

Learning check


3.1 The supply chain

3.2 The supply chain management

3.2.1 Product and service flows

3.2.2 Information flows

3.2.3 Funds flows

3.2.4 Expertise and technologies flows

3.3 Developing a supply chain strategy

3.3.1 Key elements to developing a supply chain strategy

3.3.2 Other relevant factors to developing a supply chain strategy

3.4 Supply chain performance

3.4.1 ROI and the DuPont Model

3.4.2 ROE and the equity multiplier

3.4.3 The cash-to-cash cycle

Learning check


4.1 The role of purchasing and supply

4.1.1 Purchasing and supply function

4.1.2 Purchasing and supply function in the private sector

4.1.3 Purchasing and supply function in the public sector

4.1.4 Preferential procurement policies

4.1.5 Public private partnerships

4.2 Purchasing and supply objectives4

4.2.1 Factors influencing purchasing and supply objectives

4.2.2 Characteristics of objectives

4.2.3 Linking objectives to required offers

4.2.4 Setting and prioritising objectives

4.3 Purchasing and supply policies

4.3.1 General purchasing and supply function policy

4.3.2 Ethics policy

4.3.3 Environmental purchasing policy

4.4 Operating the purchasing and supply function

4.4.1 Purchasing and supply process

4.4.2 The internal role of the purchasing and supply function

4.5 Organising a purchasing & supply department

4.5.1 The importance of the purchasing and supply function

4.5.2 (De)centralisation of the purchasing and supply function

4.5.3 Links with other departments

4.5.4 Product and customer orientation of work

4.5.5 Human resources at the purchasing and supply department

Learning check


5.1 Supply planning

5.1.1 Plan the purchases

5.1.2 Setting priorities

5.1.3 Purchase expenditure

5.1.4 Level of impact

5.2 Supply Positioning Model

5.2.1 Using the Supply Positioning Model to prioritise

5.2.2 Kraljic model

5.3 Improving your supply position

5.3.1 Increase expenditure per type of purchase

5.3.2 Reduce risk

5.4 Buyer-supplier relationships

5.4.1 Spot purchases

5.4.2 Regular trading

5.4.3 Call-off contracts

5.4.4 Fixed contracts

5.4.5 Partnership

5.4.6 Joint ventures

5.4.7 Early supplier involvement

5.4.8 Internal provision

5.5 Influence of suppliers’ perceptions

5.5.1 Suppliers’ perceptions

5.5.2 The effect on supplier relationships

5.5.3 Reverse marketing

5.5.4 Trade-offs between switching costs and supplier development

5.5.5 Linking the Supplier Perception Model to the Supply Positioning Model

Learning check


6.1 From corporate strategy to supply strategy

6.2 Strategy for routine items

6.2.1 Number of suppliers

6.2.2 Type of supplier relationships

6.2.3 Type of contract

6.2.4 Generic operational strategies

6.2.5 Specific operational strategies

6.2.6 Implications for the type of suppliers and buyers

6.2.7 Supply strategy for routine items in a nutshell

6.3 Strategy for leverage items

6.3.1 Number of suppliers

6.3.2 Type of supplier relationships

6.3.3 Type of contract

6.3.4 Generic operational strategies

6.3.5 Specific operational strategies

6.3.6 Implications for the type of suppliers and buyers

6.3.7 Supply strategy for leverage items in a nutshell

6.4 Strategy for bottleneck items

6.4.1 Number of suppliers

6.4.2 Type of supplier relationships

6.4.3 Type of contract

6.4.4 Generic operational strategies

6.4.5 Specific operational strategies

6.4.6 Implications for the type of suppliers and buyers

6.4.7 Supply strategy for bottleneck items in a nutshell

6.5 Strategy for strategic items

6.5.1 Number of suppliers

6.5.2 Type of supplier relationships

6.5.3 Type of contract

6.5.4 Generic operational strategies

6.5.5 Specific operational strategies

6.5.6 Implications for the type of suppliers and buyers

6.5.7 Strategy for strategic items in a nutshell

6.6 Strategy for commodities

6.6.1 Purchasing commodities traded on recognised exchanges

6.6.2 Purchasing commodities directly

Learning check


7.1 Market analysis benefits

7.2 Prioritising market analysis

7.3 Understanding supply markets

7.3.1 Step 1: Preparing for a supply market analysis

7.3.2 Step 2: Assessing the degree and effects of competition

7.3.3 Step 3: Forecasting market developments

7.3.4 Step 4: Understanding market drivers

7.3.5 Step 5: Assessing the price (cost/price)

7.3.6 Step 6: Segmenting the supply market

7.3.7 Step 7: Screen out less relevant segments

7.4 Appraising market segments

7.4.1 Step 1: Identify types of supply risks and opportunities

7.4.2 Step 2: Identify and screen the relevant events

7.4.3 Step 3: Research the risks and opportunities for these events

7.4.4 Step 4: Build scenarios to assess the extent of the risks and opportunities

7.4.5 Step 5: Identify which supply targets are affected

7.4.6 Step 6: Determine how much the risks and opportunities may affect your targets

7.4.7 Step 7: Select segment(s) with best balance of risks and opportunities

7.4.8 Step 8: Continue to monitor supply market risks and opportunities

7.5 Reassessing a purchase item’s rating in the Supply Positioning Model

7.6 Information support to supply market analysis

7.6.1 Types of information and information providers

7.6.2 Processing gathered information

Learning check


8.1 Financial needs

8.1.1 Assets and liabilities, working capital and liquidity

8.1.2 Assessing financial resources

8.1.3 Debt, equity and fixed assets

8.1.4 Working capital requirements

8.2 Payment

8.2.1 Main methods of payment

8.2.2 Payment risks in case of international trade

8.3 Financing techniques

8.3.1 Local Trading

8.3.2 International Trading

8.3.3 Hedging currency risks

8.3.4 Trade Cycle and Finance Instruments

8.4 Legal and financial implications

8.4.1 Implications of dealing with suppliers and buyers

8.4.2 Implications of documentary credits

8.4.3 Implications of bank loan facilities

8.4.4 Implications of claims

8.5 Purchasing and supply’s role in budgeting

8.5.1 Budgeting for operational requirements

8.5.2 Budgeting for capital requirements

Learning check

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