Purchasing and Supply Chain (with InfoTrac)

by Monczka, Robert M.; Trent, Robert J.; Handfield, Robert B.

• ISBN13: 9780324202540
• ISBN10: 0324202547
• Edition: 3rd
• Format: Hardcover
• Copyright: 2004-06-14
• Publisher: South-Western College Pub

Summary

Purchasing and Supply Chain Management, 3rd Edition is a turnkey solution for providing current and thorough coverage for this critical area of the supply chain. This book is not only a text but a reference as well and is now established as one of the leading-edge strategy and purchasing books. Students gain contextual insights and knowledge into the strategies, processes, and practices of purchasing through use of the many cases and examples. Because of their relationships with executives and practitioners worldwide, the authors are able to present unique and up-to-date insights that lead to greater understanding of the purchasing process. Purchasing and Supply Chain Management provides a hands-on, applied approach that has been thoroughly tested with student audiences to ensure learning success.

Table of Contents

Preface	xix
Part 1 Introduction	1	(26)
Introduction to Purchasing and Supply Chain Management	2	(25)
A New Competitive Environment	4	(1)
Why Purchasing Is Important	5	(1)
Understanding the Language of Purchasing and Supply Chain Management	6	(1)
Purchasing and Supply Management	7	(1)
Supply Chains and Value Chains	8	(3)
Supply Chains Illustrated	11	(1)
Achieving Purchasing and Supply Chain Benefits	12	(2)
The Supply Chain Umbrella	14	(2)
Four Enablers of Purchasing and Supply Chain Management	16	(1)
Capable Human Resources	16	(1)
Proper Organizational Design	16	(2)
Real Time and Shared Information Technology Capabilities	18	(1)
Right Measures and Measurement Systems	19	(1)
The Evolution of Purchasing and Supply Chain Management	20	(1)
Period One: The Early Years (1850--1900)	20	(1)
Period Two: Growth of Purchasing Fundamentals (1900--1939)	21	(1)
Period Three: The War Years (1940--1946)	21	(1)
Period Four: The Quiet Years (1947--Mid-1960s)	22	(1)
Period Five: Materials Management Comes of Age (Mid--1960s-Late 1970s)	23	(1)
Period Six: The Global Era (Late 1970--1999)	23	(1)
Period Seven: Integrated Supply Chain Management (Beyond 2000)	24	(1)
Looking Ahead	24	(3)
Part 2 Purchasing Operations and Structure	27	(138)
The Purchasing Process	28	(42)
Purchasing Objectives	30	(1)
Objective 1: Support Operational Requirements	30	(1)
Objective 2: Manage the Purchasing Process Efficiently and Effectively	31	(1)
Objective 3: Supply Base Management	31	(1)
Objective 4: Develop Strong Relationships with Other Functional Groups	32	(1)
Objective 5: Support Organizational Goals and Objectives	32	(1)
Objective 6: Develop Integrated Purchasing Strategies That Support Organizational Strategies	32	(1)
Responsibilities of Purchasing	33	(1)
Evaluate and Select Suppliers	33	(1)
Review Specifications	33	(1)
Act as the Primary Contact with Suppliers	34	(1)
Determine the Method of Awarding Purchase Contracts	34	(1)
E-Procurement and the Purchasing Process	34	(2)
Identify User Need for Product or Service	36	(6)
Evaluate Potential Suppliers	42	(2)
Bidding, Negotiation and Supplier Selection	44	(3)
Purchase Approval	47	(5)
Release and Receive Purchase Requirements	52	(2)
Measure Supplier Performance	54	(1)
Types of Purchases	55	(1)
Raw Materials	55	(1)
Semifinished Products and Components	55	(1)
Finished Products	56	(1)
Maintenance, Repair, and Operating Items	56	(1)
Production Support Items	57	(1)
Services	57	(1)
Capital Equipment	57	(1)
Transportation and Third-Party Purchasing	58	(1)
Improving the Purchasing Process	59	(1)
Online Requisitioning Systems from Users to Purchasing	59	(1)
Procurement Cards Issued to Users	60	(1)
Electronic Purchasing Through the Internet	60	(1)
Longer-Term Purchase Agreements	60	(1)
Online Ordering Systems to Suppliers	61	(1)
Purchasing Process Redesign	61	(1)
Electronic Data Interchange	62	(1)
Online Ordering Through Electronic Catalogs	63	(1)
Allowing Users to Contact Suppliers Directly	63	(1)
Good Practice Example: Sourcing Process at FedEx	64	(3)
Conclusion	67	(3)
Purchasing Policy and Procedures	70	(26)
Policy Overview	72	(1)
What Are the Advantages and Disadvantages of Policies?	72	(1)
What Makes an Effective Policy?	73	(1)
Purchasing Policies---Providing Guidance and Direction	74	(1)
Policies Defining the Role of Purchasing	74	(2)
Policies Defining the Conduct of Purchasing Personnel	76	(2)
Policies Defining Social and Minority Business Objectives	78	(4)
Policies Defining Buyer-Seller Relationships	82	(3)
Policies Defining Operational Issues	85	(3)
Purchasing Procedures	88	(2)
Purchasing Procedural Areas	90	(1)
Good Practice Example: Managing Maverick Spend at Deere and Delphi: An Interview with Jon Stegner	91	(2)
Conclusion	93	(3)
Purchasing Integration for Competitive Advantage	96	(38)
Integration---What Is It?	98	(1)
Internal Integration	99	(1)
Purchasing's Internal Linkages	99	(3)
External Integration	102	(1)
Purchasing's External Linkages	102	(1)
Collaborative Buyer-Seller Relationships	103	(1)
Advantages of Closer Buyer-Seller Relationships	104	(1)
Evolving from Adversarial to Collaborative Relationships	104	(1)
Obstacles to Closer Buyer-Seller Relationships	105	(1)
The Critical Role of Cross-Functional Sourcing Teams	106	(2)
Benefits Sought from the Cross-Functional Team Approach	108	(1)
Potential Drawbacks to the Cross-Functional Team Approach	109	(1)
When to Form a Cross-Functional Team	110	(1)
Improving Sourcing Team Effectiveness	111	(5)
Integrating Purchasing, Engineering, and Suppliers to Develop New Products and Services	116	(1)
Common Themes of Successful Supplier Integration Efforts	116	(8)
Supplier Integration into Customer Order Fulfillment	124	(5)
Good Practice Example: Early Supplier Involvement at MRD	129	(2)
Conclusion	131	(3)
Purchasing and Supply Chain Organization	134	(31)
Purchasing's Position Within the Organizational Structure	137	(1)
Factors Affecting Purchasing's Position in the Organizational Hierarchy	137	(1)
To Whom Does Purchasing Report?	138	(1)
Organizing the Purchasing Function	139	(1)
Specialization Within Purchasing	139	(3)
Purchasing Department Activities	142	(2)
Separating Strategic and Operational Purchasing	144	(1)
Placement of Purchasing Authority	145	(1)
Advantages of Centrally Led Purchasing	145	(3)
Advantages of Decentralized Purchasing	148	(1)
A Hybrid Purchasing Structure	149	(1)
Organizing for Supply Chain Management	149	(1)
Supply Chain Activities and Functions	150	(2)
A Supply Chain Management Structure	152	(1)
Using Teams as Part of the Organizational Structure	153	(1)
Creating the Organization of the Future	154	(5)
Good Practice Example: Air Products and Chemicals Organizes to Meet Global Challenges	159	(2)
Conclusion	161	(4)
Part 3 Strategic Sourcing	165	(172)
Purchasing and Commodity Strategy Development	166	(39)
Linking Purchasing and Corporate Strategy	169	(1)
Translating Corporate Objectives into Purchasing Goals	170	(2)
Integrative Strategy Development	172	(3)
Translating Purchasing Objectives into Purchasing Goals	175	(2)
Bringing Goals and Objectives Together---The Purchasing Strategy Development Process	177	(1)
Step 1: Define the Business Unit Requirements	177	(1)
Step 2: Define the Strategic Importance of the Purchase Requirement (Portfolio Analysis)	177	(3)
Step 3: Determine Business/Purchase Requirements and Conduct Supply Market Research	180	(1)
Step 4: Set Goals and Conduct Gap Analysis	181	(1)
Step 5: Develop Sourcing Strategy and Objectives	182	(1)
Step 6: Execute the Strategy	182	(1)
Step 7: Monitor Results and Review Performance	183	(1)
Types of Purchasing Strategies	184	(1)
Supply Base Optimization	185	(1)
Total Quality Management of Suppliers	185	(1)
Global Sourcing	185	(1)
Longer-Term Supplier Relationships	186	(1)
Early Supplier Design Involvement	186	(1)
Supplier Development	187	(1)
Total Cost of Ownership	188	(1)
E-Reverse Auctions (e-RAs)	188	(1)
Critical Role of Insourcing/Outsourcing Strategy	188	(1)
The Insourcing/Outsourcing Decision Process	189	(1)
Step 1: Company Strategy Formulation	189	(2)
Step 2: Insourcing/Outsourcing Decision Making: Conduct Total Cost Analysis of All Alternatives	191	(3)
Step 3: Implementation	194	(1)
Conclusion	194	(1)
Evolving Sourcing Strategies	195	(1)
Phase 1: Basic Beginnings	196	(1)
Phase 2: Moderate Development	196	(1)
Phase 3: Limited Integration	197	(1)
Phase 4: Fully Integrated Supply Chains	197	(2)
Observations on Purchasing Strategy Evolution	199	(1)
Good Practice Example: Supplier Integration Strategies at BTR Engineering	200	(2)
Conclusion	202	(3)
Supplier Evaluation and Selection	205	(32)
The Supplier Evaluation and Selection Process	207	(1)
Recognize the Need for Supplier Selection	208	(1)
Identify Key Sourcing Requirements	208	(1)
Determine Sourcing Strategy	208	(1)
Identify Potential Supply Sources	209	(3)
Limit Suppliers in Selection Pool	212	(2)
Determine the Method of Supplier Evaluation and Selection	214	(1)
Select Supplier and Reach Agreement	215	(1)
Key Supplier Evaluation Criteria	215	(1)
Management Capability	215	(2)
Employee Capabilities	217	(1)
Cost Structure	217	(1)
Total Quality Performance, Systems, and Philosophy	217	(1)
Process and Technological Capability	218	(1)
Environmental Regulation Compliance	218	(1)
Financial Stability	219	(1)
Production Scheduling and Control Systems	219	(1)
E-Commerce Capability	220	(1)
Supplier's Sourcing Strategies, Policies, and Techniques	221	(1)
Longer-Term Relationship Potential	221	(1)
Developing a Supplier Evaluation and Selection Survey	222	(1)
Step 1: Identify Supplier Evaluation Categories	223	(1)
Step 2: Assign a Weight to Each Evaluation Category	223	(1)
Step 3: Identify and Weigh Subcategories	223	(1)
Step 4: Define Scoring System for Categories and Subcategories	224	(2)
Step 5: Evaluate Supplier Directly	226	(1)
Step 6: Review Evaluation Results and Make Selection Decision	226	(1)
Step 7: Review and Improve Supplier Performance Continuously	227	(1)
Critical Supplier Selection Issues	227	(2)
Reducing Supplier Evaluation and Selection Cycle Time	229	(3)
Good Practice Example: C.A.S.E's Shared Internet Database Supports Supplier Evaluation	232	(2)
Conclusion	234	(3)
Supplier Quality Management	237	(29)
Overview of Supplier Quality Management	239	(1)
What Is Supplier Quality?	239	(1)
Why Be Concerned with Supplier Quality?	240	(2)
Factors Affecting Purchasing's Role in Managing Supplier Quality	242	(1)
Supplier Quality Management Using a Total Quality Perspective	243	(1)
Defining Quality in Terms of Customers and their Requirements	243	(2)
Pursuing Quality at the Source	245	(2)
Stressing Objective Rather than Subjective Measurement and Analysis	247	(1)
Emphasizing Prevention Rather than Detection of Defects	247	(1)
Focusing on Process Rather than Output	248	(2)
Striving for Zero Defects	250	(1)
Establishing Continuous Improvement as a Way of Life	251	(1)
Making Quality Everyone's Responsibility	251	(1)
Pursuing Six Sigma Supplier Quality	252	(3)
Using ISO 9000 and Baldrige Criteria to Assess Supplier Quality Systems	255	(1)
ISO 9000 Registration	256	(2)
The Malcolm Baldrige National Quality Award	258	(2)
Good Practice Example: Supplier Certification at Alcoa	260	(3)
Conclusion	263	(3)
Supplier Management and Development: Creating a World-Class Supply Base	266	(35)
Supplier Performance Measurement	269	(1)
Supplier Measurement Decisions	269	(2)
Types of Supplier Measurement Techniques	271	(4)
Supply-Base Optimization: Creating a Manageable Supply Base	275	(3)
Advantages of an Optimized Supply Base	278	(1)
Risks of Maintaining Fewer Suppliers	279	(1)
Formal Approaches to Supply Base Reduction	280	(2)
Summary of Supplier Optimization	282	(1)
Supplier Development: A Strategy for Improvement	283	(1)
A Process Map for Supplier Development	283	(4)
Supplier Development Efforts That Sometimes Don't Work	287	(1)
Overcoming the Barriers to Supplier Development	287	(1)
Buyer-specific Barriers	288	(2)
Interface Barriers to Supplier Development	290	(2)
Supplier-specific Barriers	292	(2)
Lessons Learned from Supplier Development	294	(1)
Good Practice Example: Supplier Measurement Helps FedEx Manage a Worldwide Supply Base	295	(3)
Conclusion	298	(3)
Worldwide Sourcing	301	(36)
An Overview of Worldwide Sourcing	304	(2)
Why Source Worldwide?	306	(2)
Barriers to Worldwide Sourcing	308	(1)
Progressing from Domestic Buying to International Purchasing	309	(1)
Information about Worldwide Sources	309	(2)
Supplier Selection Issues	311	(1)
Cultural Understanding	311	(1)
Language and Communication Differences	312	(1)
Logistical Issues	312	(1)
Legal Issues	313	(1)
Organizational Issues	313	(2)
Countertrade Requirements	315	(3)
Costs Associated with Worldwide Sourcing	318	(3)
Managing International Currency Risk	321	(2)
Progressing from International Purchasing to Global Sourcing	323	(1)
Factors Separating Successful from Less Successful Global Sourcing Efforts	323	(6)
Global Sourcing Benefits	329	(1)
Future Global Sourcing Trends	329	(2)
Good Practice Example: Otis Elevator Manages Worldwide Sourcing	331	(3)
Conclusion	334	(3)
Part 4 Strategic Sourcing Processes	337	(174)
Strategic Cost Management	338	(39)
Strategic Cost Management: A Structured Approach to Cost Reduction	340	(6)
Price Analysis	346	(1)
Market Structure	346	(1)
Economic Conditions	347	(1)
Pricing Strategy of the Seller	347	(1)
Market-driven Pricing Models	348	(3)
Using the Producer Price Index to Manage Price	351	(4)
Cost Analysis Techniques	355	(1)
Cost-based Pricing Models	355	(1)
Product Specifications	356	(1)
Estimating Supplier Costs Using Reverse Price Analysis	357	(4)
Break-Even Analysis	361	(3)
Total Cost of Ownership (TCO)	364	(1)
Building a Total Cost of Ownership Model	365	(1)
The Importance of Opportunity Costs	366	(1)
Important Factors to Consider When Building a TCO Model	366	(1)
Example of a TCO Model	366	(2)
Collaborative Approaches to Cost Management	368	(1)
Target Pricing	368	(1)
Cost Savings Sharing Pricing	369	(1)
Prerequisites for Successful Target and Cost-based Pricing	370	(1)
When to Use Collaborative Cost Management Approaches	370	(1)
An Example of Target Pricing and Cost Savings Sharing	371	(2)
Good Practice Example: IBM Drives Strategic Cost Management Across the Supply Chain	373	(2)
Conclusion	375	(2)
Purchasing and Supply Chain Analysis: Tools and Techniques	377	(34)
Project Management	379	(1)
Defining Project Success	379	(1)
Project Phases	380	(3)
Project Planning and Control Techniques	383	(1)
Rules for Constructing a Project Management Network	383	(1)
Project Management Example: Sourcing Strategy	384	(3)
Project Management with Time Estimates	387	(3)
Learning Curves	390	(1)
Components of the Learning or Experience Curve	391	(1)
When to Use the Learning Curve	391	(1)
Learning Curve Illustrated	392	(2)
Learning-Curve Problem	394	(2)
Value Engineering/Value Analysis	396	(1)
Who Is Involved in Value Analysis?	396	(1)
Tests for Determining Value in a Product or Service	397	(1)
The Value Analysis Process	398	(1)
Quantity Discount Analysis	399	(1)
Quantity Discount Analysis Illustrated	399	(1)
Process Mapping	399	(5)
Process Mapping Illustrated	404	(2)
Good Practice Example: Energy Sourcing Strategy Project at Bethlehem Steel	406	(3)
Conclusion	409	(2)
Negotiation	411	(28)
What Is Negotiation?	413	(1)
Negotiation Framework	413	(1)
Identify or Anticipate a Purchase Requirement	414	(1)
Determine If Negotiation Is Required	414	(3)
Plan for the Negotiation	417	(1)
Conduct the Negotiation	418	(1)
Execute the Agreement	419	(1)
Negotiation Planning	419	(1)
Develop Specific Objectives	420	(1)
Analyze Each Party's Strengths and Weaknesses	420	(1)
Gather Relevant Information	420	(1)
Recognize Your Counterpart's Needs	421	(1)
Identify Facts and Issues	421	(1)
Establish a Position on Each Issue	421	(1)
Develop a Negotiating Strategy and Tactics	422	(1)
Brief Other Personnel	422	(1)
Practice the Negotiation	423	(1)
Power in Negotiation	423	(1)
Sources of Negotiating Power	424	(1)
Concessions	425	(2)
Negotiation Tactics: Trying to Get to Yes	427	(2)
Win-Win Negotiation	429	(1)
International Negotiation	430	(3)
Good Practice Example: Mack Trucks Uses Negotiation to Rev Up Its Sourcing Process	433	(3)
Conclusion	436	(3)
Contract Management	439	(32)
Types of Contracts	441	(1)
Fixed-Price Contracts	441	(2)
Cost-based Contracts	443	(1)
Considerations When Selecting Contract Types	444	(2)
Long-Term Contracts	446	(1)
Benefits of Long-Term Contracts	446	(3)
Risks of Long-Term Contracts	449	(1)
Contingency Elements of Long-Term Contracts	450	(2)
Nontraditional Contracting	452	(1)
IT Systems Contracts	452	(1)
Minority-owned Supplier Contracts	453	(1)
Consulting Contracts	454	(2)
Construction Contracts	456	(2)
Other Types of Contracts	458	(2)
How to Write a Contract	460
Settling Contractual Disputes	451	(10)
Legal Alternatives	461	(1)
Arbitration	462	(1)
Other Forms of Conflict Resolution	463	(3)
Good Practice Example: Alliance Contracts That Save Dollars at a Chemical Company	466	(2)
Conclusion	468	(3)
Purchasing Law and Ethics	471	(40)
Legal Authority and Personal Liability of the Purchasing Manager	473	(1)
Laws of Agency	473	(1)
Legal Authority	473	(1)
Personal Liability	474	(2)
Purchasing Ethics	476	(1)
Risks of Unethical Behavior	476	(1)
Types of Unethical Purchasing Behavior	477	(2)
ISM Professional Code of Ethics	479	(2)
Supporting Ethical Behavior	481	(2)
Contract Law	483	(1)
Essential Elements of a Contract	483	(2)
The Purchase Order---Is It a Contract?	485	(3)
Cancellation of Orders and Breach of Contract	488	(3)
Acceptance and Rejection of Goods	491	(1)
Honest Mistakes	492	(1)
The Uniform Commercial Code	493	(1)
Purchasing Law Before the UCC	493	(1)
Warranties	494	(3)
Transportation Terms and Risk of Loss	497	(2)
Seller's and Buyer's Rights	499	(1)
Patents and Intellectual Property	500	(3)
Other Laws Affecting Purchasing	503	(1)
Laws Affecting Antitrust and Unfair Trade Practices	503	(1)
Laws Affecting Global Purchasing	503	(2)
Good Practice Example: Eaton's CEO Talks Openly About Ethics	505	(2)
Conclusion	507	(4)
Part 5 Critical Supply Chain Elements	511	(148)
Managing Supply Chain Inventory and Delivering Perfect Customer Orders	512	(35)
Understanding Supply Chain Inventory	515	(1)
Types of Inventory	515	(1)
Inventory-related Costs	516	(3)
Inventory Investment---Asset or Liability?	519	(2)
The Right Reasons for Investing in Inventory	521	(1)
Support Production Requirements	521	(1)
Support Operational Requirements	521	(1)
Support Customer Service Requirements	522	(1)
Hedge Against Marketplace Uncertainty	522	(1)
Take Advantage of Order Quantity Discounts	522	(1)
The Wrong Reasons for Investing in Inventory	523	(1)
Poor Quality and Material Yield	523	(1)
Unreliable Supplier Delivery	523	(1)
Extended Order-Cycle Times	524	(1)
Inaccurate or Uncertain Demand Forecasts	524	(1)
Specifying Custom Items for Standard Applications	524	(1)
Extended Material Pipelines	525	(1)
Inefficient Manufacturing Processes	525	(1)
Creating the Lean Supply Chain	525	(1)
Just-in-Time Purchasing	526	(1)
Just-in-Time Transportation	527	(2)
Just-in-Time Production	529	(2)
Managing Inventory Investment	531	(2)
Achieve Perfect Record Integrity	533	(1)
Improve Product Forecasting	534	(1)
Standardize and Simplify Product Design	535	(2)
Leverage Companywide Purchase Volumes	537	(1)
Use Suppliers for On-Site Inventory Management	537	(1)
Develop Supply Chain Planning Systems and Support Structure	538	(1)
Reduce Supplier-Buyer Cycle Times	538	(1)
Delivering the Perfect Customer Order	539	(1)
Material Requirements Planning System	539	(1)
Distribution Resource Planning System	540	(1)
Supply Chain Inventory Planners	540	(1)
Automated Inventory Tracking Systems	541	(1)
Good Practice Example: Managing Low-Value Inventory for High-Value Savings at Lockheed	541	(3)
Conclusion	544	(3)
Purchasing Services	547	(40)
Transportation Management	549	(1)
Deregulation of Transportation and Purchasing's New Role	550	(2)
A Decision-making Framework for Developing a Transportation Strategy	552	(13)
Outsourcing Logistics to Third-Party Logistics Providers	565	(1)
Select Providers	565	(1)
Gain Access to Critical and Timely Data	566	(1)
Develop Systems Visibility to Material Shipments	567	(1)
Develop Closer Relationships with Fewer Providers	567	(1)
Establish Companywide Contracts	568	(1)
Purchasing Services and Indirect Items	568	(3)
Internal Methods of Managing Indirect Spend	571	(1)
External Methods of Managing Indirect Spend	572	(2)
Enabling Tactics and Strategies	574	(2)
Sourcing Professional Services	576	(1)
Have a Clearly Defined Scope	576	(1)
Move to a Centralized Structure	577	(1)
Develop a Professional Services Database	578	(1)
Develop a Sound Procedure for Evaluation and Selection of Consultants	579	(1)
Optimize the Supply Base	579	(1)
Develop a Standardized Contract	580	(1)
Monitor Results	580	(1)
Develop Policy Compliance	580	(1)
Good Practice Example: Bank of America's Document Management Services	581	(3)
Conclusion	584	(3)
Supply Chain Information Systems and Electronic Commerce	587	(40)
An Overview of the E-Supply Chain	589	(1)
Supply Chain Information Flows	590	(1)
A Map of SCM Systems	591	(5)
Drivers of New Supply Chain Systems and Applications	596	(1)
Internal and External Strategic Integration	597	(1)
Globalization and Communication	597	(1)
Data Information Management	597	(1)
New Business Processes	597	(1)
Replacement of Obsolete Systems	598	(1)
Strategic Cost Management	598	(1)
Enterprise Resource Planning Systems	598	(2)
Implementing ERP Systems	600	(1)
Purchasing Databases and Data Warehouses	601	(2)
Technology for Electronic Communication Between Buyers and Sellers	603	(1)
Electronic Data Interchange (EDI)	603	(1)
EDI and the Internet	604	(2)
E-Sourcing/Supply and Web-based Systems	606	(1)
Types of Systems	607	(4)
Reverse Auctions	611	(1)
Evolving E-Sourcing Vendors	611	(3)
Bottom Line	614	(1)
E-Sourcing and Supply: Fully Integrated Systems	614	(1)
What Is Information Visibility?	615	(1)
Dell's Information Visibility System: The Benchmark	615	(1)
Benefits of Information Visibility	616	(1)
I-Supply: An Example of a Visibility System	617	(4)
Good Practice Example: Deploying Information Visibility Systems at a Tier 1 Automotive Company	621	(3)
Conclusion	624	(3)
Performance Measurement and Evaluation	627	(32)
Purchasing and Supply Chain Performance Measurement and Evaluation	629	(1)
Why Measure Performance?	630	(1)
Problems with Purchasing and Supply Chain Measurement and Evaluation	630	(2)
Purchasing and Supply Chain Performance Measurement Categories	632	(1)
Price Performance Measures	632	(3)
Cost-Effectiveness Measures	635	(2)
Quality	637	(1)
Time-related Measures	637	(1)
Technology-Innovation Measures	638	(1)
Physical Environment and Safety	639	(1)
Asset Management and Integrated Supply Chain Measures	639	(1)
Administration and Efficiency Measures	640	(1)
Governmental/Social	641	(1)
Internal Customer Satisfaction	642	(1)
Supplier Performance Measures	642	(1)
Strategic Performance Measures	642	(2)
Developing a Performance Measurement and Evaluation System	644	(1)
Determine Which Performance Categories to Measure	644	(1)
Develop Specific Performance Measures	644	(3)
Establish Performance Objectives for Each Measure	647	(1)
Finalize System Details	647	(1)
Implement and Review System Performance and Measures	648	(1)
Performance Benchmarking: Comparing Against the Best	648	(1)
Benchmarking Overview	648	(3)
The Benchmarking Process	651	(1)
A Summary of Purchasing Measurement and Evaluation Characteristics	652	(1)
System Characteristics	653	(1)
Human Resource Characteristics	653	(1)
Good Practice Example: Using Measurement to Drive Continuous Supply Chain Improvement at Accent Industries	654	(1)
Conclusion	655	(4)
Part 6 Future Directions	659	(26)
Purchasing and Supply Chain Changes and Trends	660	(25)
Performance Improvement Requirements	662	(1)
Purchasing and Supplier Importance	663	(2)
Organization and Human Resources	665	(3)
Information Systems Development	668	(4)
Performance Measurement	672	(1)
Supply Base Management	673	(3)
Purchasing Responsibilities and Activities	676	(2)
Twelve High-Impact Sourcing and Supply Chain Strategies for 2005-2010	678	(1)
Good Practice Example: General Motors Works to Secure Its Future	679	(3)
Conclusion	682	(3)
Cases	685	(50)
Index	735