Deck 1: The Progression to Professional Supply Management

Question 1

In the history of power source relationships,percentage wise,labor costs went down while materials costs went up.

Answer 1

True

Question 2

Some 75% of many manufacturer's quality problems can be traced back to defects in purchased materials.

Answer 2

True

Question 3

Materials have always been vital in the history of industrial growth.

Answer 3

False

Question 4

Strategic sourcing starts with the analysis of the supply market.

Question 5

Of the factors that make up total cost of ownership (TCO),the big majority of this cost is in the acquisition cost.

Question 6

Generally speaking,firms with the fasted time to market with new products by using cross functional teams including suppliers,enjoy higher profits.

Question 7

SM requires change,driven by upper management.
Note: SM means Supply Management

Question 8

The final step in the typical purchasing cycle for materials in to audit the invoice.

Question 9

Supply management plays a major role in improving the "bottom line" by driving sales up and costs down.

Question 10

World-class supply managers proactively improve supply processes.

Question 11

When a group or network of firms collaborates in a partnership (alliance)fashion; the collaboration is sometimes referred to as a strategic network,virtual corporation,or extended enterprise.

Question 12

The term "value chain" includes both the upstream and downstream portion of the supply chain.

Question 13

Supply management must be a core competency based on its impact on the bottom line.

Question 14

"Lean thinking" is primarily concerned with conversion cost.

Question 15

When supply savings and increased sales due to superior supply chain management are combined,it is not uncommon to increase ROI 50%.

Question 16

The term "supply chain" means all the members are linked together in one master contract covering a long time period.

Question 17

Supply management is also known as procurement at many firms and government agencies.

Question 18

The key role of a supply management professional is one of leadership.

Question 19

The extended enterprise means a group of firms collaborating as a supply alliance,i.e.a strategic network or virtual corporation.

Question 20

Purchasing is primarily a clerical activity.

Question 21

Strategic sourcing requires one-way improvement efforts where the buying firm tells the supplying firm what is best.

Question 22

Strategic sourcing is about understanding the markets you're purchasing from inside and out and learning from your own organization and your suppliers' organizational processes,working as a mediator between suppliers and your organization,and capturing information and using it to improve relationships.

Question 23

When a group or network of firms collaborates in a partnership (alliance)fashion; the collaboration is sometimes referred to as a tactical network.

Question 24

The term value chain means we include the supply chain in our analysis and management with:
A) end consumer

A) opportunity cost
B) the downstream portion of the chain and distribution, such as marketing
C) channels of distribution
D) financial impact studies

Question 25

When we add the term networks to the supply and value chains,we are emphasizing the need to focus on and interactively communicate with:
A) all support organizations

A) suppliers
B) distributors
C) final consumers
D) tiers of suppliers

Question 26

SM does not require change driven by upper management.

Question 27

The five "right objectives" of purchasing are:
A) Quality, Quantity, Price, Time, Place

A) Service, Time, Quality, Price, Quantity
B) Cost, Service, Specs, Time, Quantity
C) Place, Time, Price, Ethics, Contract
D) Agent, Supplier, Contract, Price, Quantity

Question 28

World-class supply managers need not improve supply processes before the processes have been implemented.

Question 29

When the group of firms view each other as partners and collaborate effectively for the good of the larger group,then they leave established an extended enterprise characterized by virtual integration.

Question 30

The major reason supply management can greatly improve a firm's return on investment (ROI)is:
A) every dollar saved in purchasing is = to a new dollar of profit

A) the reduction of post ownership costs
B) the reduction of downtime costs
C) the reduction of quality costs
D) the reduction of acquisition cost

Question 31

Strategic sourcing differs from tactical purchasing in that this activity periodically:
A) A, B &C

A) analyzes the organization's spend
B) analyzes the supply market
C) develops sourcing strategy and plans
D) outsources basic business services such as security

Question 32

The concept of a supply chain means we analyze and manage:
A) key suppliers

A) a chain or network of upstream suppliers
B) converters
C) original equipment manufacturers (OEM)
D) extractors

Question 33

Strategic sourcing is about dominating the markets you're purchasing from through force and intimidation,never letting the supplier forget that you are the "boss."

Question 34

When the group of firms view each other as partners and collaborate effectively for the good of the larger group,then they leave established a transactional relationship.

Question 35

Maintenance is an issue that should be considered after equipment has been purchased.

Question 36

The term supply management is broader than the purchasing function because it::
A) includes measuring the total cost of ownership

A) includes marketing
B) includes operations/production
C) includes managing relationships with suppliers
D) includes negotiating enforceable contracts

Question 37

Supply management's impact on the bottom line includes the ability to increase sales by:
A) none of the above

A) reducing the development time of new products by using cross functional teams including suppliers
B) obtaining the lowest possible prices
C) finding suppliers with the fastest delivery times
D) all of the above

Question 38

Strategic sourcing requires two-way continuous improvement process work from each organization.

Question 39

Supply management does not have much of an impact on the bottom line.

Question 40

"Lean Thinking" can help reduce total cost of ownership (TCO),this means the supply team in the entire "chain" must work to:
A) reduce processing costs

A) lower conversion cost
B) reduce cycle time cost
C) reduce risk cost
D) reduce non-value costs

Question 41

Which bullet is not true of the world-class stage of SM?

A) Time based competition
B) Bottom line impact: overhead
C) Virtually defect free materials and services
D) Leverage supplier technology
E) Integrated supply strategy

Question 42

Which is not true about supply chains and networks?

A) The supply chain extends from the ultimate customer back to Mother Earth
B) The chain is viewed as a whole, a single entity rather than fragmented groups
C) Money enters the supply chain only when the ultimate customer buys a product or service
D) Supply chains are relatively easy to describe and visualize
E) The term supply chain is a more accurate description than supply network

Question 43

Which statement about SM is not true?

A) SM recognizes the global environment
B) SM is a philosophy
C) SM is synonymous with logistics
D) SM is proactive
E) SM spans functional boundaries

Question 44

In Appendix A,The "Mechanics of Supply Management",the typical purchasing cycle for materials starts with:
A) communicating the need

A) investigating and selecting the supplier
B) negotiating a contract
C) defining and describing the need
D) preparing the purchase order

Question 45

Which bullet is not true of the clerical stage of SM?

A) Relationships: personal
B) Design: suppliers are involved
C) Bottom line impact: overhead
D) Reporting: very low level
E) Data: not available

Question 46

Which of the following is not one of The Four Phases of Supply Management?

A) Generation of Requirements
B) Sourcing
C) Pricing
D) Profit Sharing
E) Post Award Activities

Question 47

Which statement about SM is not true?

A) SM spans company borders
B) SM focuses on optimization of the supply chain
C) SM requires change from upper management
D) SM requires continuous improvement
E) SM relies on mathematical models

Question 48

Which bullet is not true of the mechanical stage of SM?

A) Relationships: transactional and adversarial
B) Bottom line impact: revenue neutral
C) Active in source selection
D) Reporting: low level
E) Data: used to expedite

Question 49

Which bullet is not true of the clerical stage of SM?

A) Process Paperwork
B) Confirm actions of others
C) Emphasis: convenience
D) Total cost of ownership focus
E) Relationships: personal

Question 50

The term extended enterprise is an extension of supply networks,we now have:
A) adaptive networks

A) true value creation
B) real value maintenance
C) innovative and virtual integration
D) a network of firms collaborating in partnership

Question 51

Which bullet is not true of the proactive stage of SM?

A) Near defect free materials and services
B) Emphasis: cost, quality and timeliness
C) Reporting: low level
D) Relationships: transactional and collaborative
E) Bottom line impact: profit contributor

Question 52

Which bullet is not true of the mechanical stage of SM?

A) Engage in eCommerce II
B) Transactional focus
C) React to requisitions
D) Not involved in key source selections
E) Emphasis: purchase price

Question 53

Which bullet is not true of the world-class stage of SM?

A) React to requisitions
B) Relationships: transactional, collaborative and alliance
C) Bottom line impact: increase shareholder value
D) Reporting: member, executive group
E) Data: facilitates strategic planning

Question 54

Which bullet is not true of the proactive stage of SM?

A) Coordinate procurement system
B) Develop suppliers
C) Long-term contracts
D) Involved in development of requirements
E) Not involved in key source selections

Question 55

Which bullet is not true of the proactive stage of SM?

A) Involved in development of requirements
B) Short-term contracts
C) Plan for recurring requirements
D) Procurement adds value
E) Active in source selection

Question 56

Which action is not necessary in implementing SM?

A) Senior management must recognize supply management's critical nature to the firm
B) Senior management must support the required transformation of supply management to world class
C) Firms must know where they are in relation to where they want to be
D) Firms must benchmark best-in-class practices and develop metrics
E) Firms must force their suppliers into world-class compliance

Question 57

Which bullet is not true of the world-class stage of SM?

A) Supply management a core competence
B) Strategic sourcing
C) Bottom line impact: overhead
D) Manage risk
E) Emphasis: total cost relationships

Question 58

Which of the following is generally not true about supply management and the bottom line?

A) Purchased items account for a large percentage of the cost of goods sold. Hence, a reduction in cost of purchased goods has a major impact on the bottom line
B) A Euro increase in sales is equivalent to a Euro decrease in materials cost in impacting the bottom line
C) Outsourcing allows firms to focus on their core competencies, which reduced potential for waste, which then can improve the bottom line
D) A dollar saved in materials cost is usually considered a dollar increase in profit, which directly translates into bottom line savings
E) Supply management can work collaboratively with suppliers to discover opportunities to lower costs, which ultimately improves the bottom line

Question 59

Which bullet is not true of the proactive stage of SM?

A) Reporting: upper management
B) Data: facilitates sourcing and pricing
C) Fulfill social responsibilities
D) Confirm actions of others
E) Engage in electronic commerce

Question 60

Which bullet is not true of the world-class stage of SM?

A) Monitor supply environment
B) Develop and implement commodity strategies
C) Supply base by design
D) Relationships: personal
E) Develop and manage alliances and networks

Question 61

Which of the following is not a strategic supply management activity?

A) Activity Based Costing
B) Environment Monitoring
C) Integrated Supply Strategy
D) Commodity Strategies
E) Data Management

Question 62

Which of the following bullets is not true about supply management systems?

A) Supply management systems require software optimization models to run effectively
B) Virtually all firms have supply management systems
C) A cross-functional approach to supply management systems enables the lowest total cost
D) Carefully selected suppliers should also join in-house cross-functional teams in developing supply management systems
E) Supply management systems that include reverse auctions, exchanges, and real-time electronic transmissions only increase the importance of supply management

Question 63

Which of the following is not a strategic supply management activity?

A) Environment Monitoring
B) Supply Chain / Supply Networks
C) Operations Research
D) Social Responsibilities
E) Understand Key Supply Industries

Question 64

Which of the following is not a strategic supply management activity?

A) Corporate Strategic Plans
B) Simulation Modeling
C) Strategic Sourcing
D) Strategic Supply Alliances
E) Supply Chain / Supply Networks