Purchasing and Supply Chain Management

Fourth Edition

W. C. Benton, Jr. - Fisher College of Business, Ohio State University, USA

October 2020 | 608 pages | SAGE Publications, Inc

Purchasing and Supply Chain Management introduces students to purchasing as it relates to the supply chain and other functions and systems within an organization, such as marketing, logistics, and operations. Author W. C. Benton, Jr. draws from more than 30 years of practice, instruction, research, and consulting experience to teach students proactive collaboration, negotiation, and analytics. Through a step-by-step approach, readers will gain data-driven purchasing skills crucial for the next generation of professionals. The Fourth Edition is fully updated with new real-world cases, the latest research, and current coverage of key trends in the field.

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Preface

Acknowledgments

About the Author

Part I: Introduction to Purchasing and Supply Chain Management

Chapter 1: Purchasing and Supply Chain Management

Introduction

Purchasing Managers, Buyers, and Purchasing Agents

The Evolution of the Purchasing and Supply Management Function

The Supply Management Process

Purchasing Dollar Responsibility

Integrated Supply Management (ISM)

Organizing for Purchasing

Reporting Structure

Professionalism within Purchasing and Supply Management

Summary

Chapter 2: Purchasing Decisions and Business Strategy

Introduction

The Relationship Between Purchasing and Competitive Strategy

Supply Chain Strategy

Supplier Relationship Quality (SRQ)

The Integrated Buying Model

The Strategic Sourcing Plan

Purchasing Strategy Trends

Summary

Appendix: Supply Chain Relationship Quality Study

Chapter 3: The Legal Aspects of Purchasing

Introduction

Authority of the Purchasing Manager

Contracts and Purchase Orders

Offers

Execution of Contracts and Purchase Orders by the Purchasing Manager

The Legal Impact of the Information Age

Purchasing and Ethics

Women and Minority Compliance

Summary

Part II: Materials Management

Chapter 4: Materials Management

Introduction

Materials Requirements Planning and Capacity Requirements

Throughput Time—Velocity

Order Cycle

Customer Satisfaction

Quality

Specifying Materials

Maintenance, Repair, and Operating (MRO) Supplies

Tooling

Summary

Chapter 5: Inventory Management

Introduction

Independent Versus Dependent Demand

Inventory Management Overview

ABC Classification of Inventory Items

Independent Demand

Dependent Demand Systems

Summary

Appendix: Areas Under the Normal Curve

Chapter 6: Just-in-Time (Lean) Purchasing

Introduction

Lean Production Systems

Just-In-Time Production System

Kanban Production Control System

Significance of JIT Purchasing

Purchasing Benefits

Implementation of JIT Purchasing

Role of Culture

Critical Analysis of the JIT Concept

Summary

Part III: Fundamentals of Purchasing and Supply Chain Management

Chapter 7: Purchasing Procedures, E-Procurement, and Systems Contracting

Introduction

Purchasing Procedures

Systems Contracting

E-Procurement

Reverse Auctions

Electronic Data Interchange (EDI) and Purchasing

Radio Frequency Identification (RFID)

Adopting New Technologies

Summary

Appendix: Systems Contract Agreement

Chapter 8: Supplier Selection and Evaluation

Introduction

The Buy Decision: Outsourcing

Sources of Supplier Information

Strategic Source Selection

Supplier Relationship Management

Supplier Relationship Management Programs

Supplier Development Programs

Supplier Evaluation Programs

Single Versus Multiple Sources

Industry Examples

Summary

Chapter 9: Strategic Outsourcing

Introduction

Why Do Organizations Outsource Business Processes?

The Hidden Costs of Outsourcing

Core Competencies

Outsourcing Trends

Elements of Strategic Outsourcing

Summary

Chapter 10: Global Sourcing

Introduction

Costs of Global Sourcing

Currency Exchange Rates

Organizational and Behavioral Issues

Global Sourcing as a Strategic Sourcing Option

Protectionism

Importance of Negotiations

Global Provider Opportunism

U.S. Export Administration Regulations

Foreign Trade Zones

Summary

Appendix: Outsourcing Policy Example

Chapter 11: Supply Partnerships and Supply Chain Power

Introduction

Benchmark Supplier Partnerships: Chrysler Corporation

Partnerships: Definition and Overview

The Evolving Supply Chain Strategy

Supply Chain Partnerships

Power Influences on Supply Chain Relationships

Summary

Chapter 12: Total Quality Management (TQM) and Purchasing

Introduction

Total Quality Management and Supply Chain Management

TQM Implementation Problems

Quality Requirements for Suppliers

Statistical Process Control, Six Sigma, and the Taguchi Method

Quality Awards and Certifications

Continuous Improvement and the Supplier

Engineering and Design

Summary

Appendix A: The Taguchi Method

Appendix B: Acceptance Sampling

Part IV: Price/Cost Analysis and Negotiation Strategies

Chapter 13: Price Determination

Introduction

The Purchasing Decision

Price-Setting Strategy

Discounts

Price Determination

The Learning Curve

Pricing Strategy

Project Pricing

The Price/Cost Analysis Process

Summary

Appendix A: The Robinson–Patman Act—General Price Discrimination

Appendix B: Unit Factors for Progress Functions

Appendix C: Estrada Systems

Chapter 14: Bargaining and Negotiations

Introduction

Distributive Versus Integrative Bargaining

Psychological Bargaining Framework

Economic Bargaining Framework

An Experiment in Distributive Bargaining

Planning for a Formal Negotiation

An Intergrated Model of the Buyer–Seller Interaction

Summary

Part V: Special Purchasing Applications

Chapter 15: Purchasing Transportation Services

Introduction

Transportation’s Role in Purchasing

Three Transportation Purchasing Examples

The Impact of the North American Free Trade Agreement (NAFTA) on Domestic Transportation

Summary

Chapter 16: Equipment Acquisition and Disposal

Introduction

The Capital Equipment Acquisition Process

Disposal of Capital Equipment

Purchasing New Versus Used Capital Equipment

Lease Versus Borrow-and-Purchase Example

Summary

Appendix A: Federal Acquisition Regulation; Electronic and Information Technology

Appendix B: Discount Rates

Chapter 17: Health Care Purchasing and Supply Management

Introduction

Purchasing, Supplies, and Services

Health Care Supply Chain Management

Methods of Supply Management

Complicating Factors Unique to Health Care for Inventory Control

Current Trends

Acquisition of Capital Equipment Process Overview

Group Health Insurance

Summary

Appendix: Purchasing Health Care Plans

Chapter 18: Sourcing Professional Services

Introduction

Service Sector Characteristics and Strategies

Outsourcing and the Service Sector

Managing Outsourced Services

Purchasing Professional Services

Summary

Appendix A: Preliminary Exploratory Interviews

Appendix B: FHWA Project Example

Appendix C: Fortune 500 Company Example

Cases

Glossary

Index

Supplements

Instructor Resource Site
edge.sagepub.com/benton4e

Online resources included with this text

The online resources for your text are available via the password-protected Instructor Resource Site, which offers access to all text-specific resources, including a test bank and editable, chapter-specific PowerPoint® slides.

Student Study Site
edge.sagepub.com/benton4e

The open-access Student Study Site makes it easy for students to maximize their study time, anywhere, anytime. It offers flashcards that strengthen understanding of key terms and concepts, as well as learning objectives that reinforce the most important material.

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Key features

NEW TO THIS EDITION:

New coverage includes:
- effect of COVID-19 on the health care supply chain
- selecting, managing, and monitoring complex global outsourcing services
- professional service sector procurement
- professionalism, ethics, and the law
Expanded coverage includes:
- Health care purchasing and supply chain management
- e-procurement technology
- price/analysis, negotiations, and the competitive bidding trap
- supply chain relationship management
- New real-world case studies based on practical organizational situations reinforce the lessons learned from chapters.
- Revised chapter summaries allow students to review the material in direct relation to chapter-opening learning objectives.

KEY FEATURES:

A focus on the interrelationships of purchasing with the rest of the functional and system areas of the organization takes into account finance, marketing, accounting, logistics, supply chain management, and operations management.
Specialized topical areas cover the latest trends in the industry not often covered in other texts, such as transportation services, equipment acquisition and disposal, health care services, and professional sourcing services.
An emphasis on globalization reflects the increasing importance of supply chain partnerships, global sourcing, and total quality management.

Sample Materials & Chapters

Chapter 1: Purchasing and Supply Chain Management

Chapter 2: Purchasing Decisions and Business Strategy

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Supplements

Sample Materials & Chapters