Introduction to Supply Management
Terms
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- Theory X
- McGregor's supervisor-centered style. Managers believe that employees are lazy, uncreative, undisciplined, and generally not interested in doing a good job.
- Theory Y
- McGregor subordinate-centered. Management assumes employees may be ambitious, self-motivated, accept responsibility, exercise self-control, self-direction, autonomy and empowerment. It is believed that employees enjoy their mental and physical work duties.
- Maslow's Hierarchy of Needs
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Pyrimid:
1. Physiological needs
2. Safety needs
3. Social needs
4. Esteem needs
5. Growth needs or
Self-actualization - Expectancy Theory
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Victor Vroom -
An individual will act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
Effort-Performance
Performance-Reward Attractiveness-How attractive is the reward? - Enpowerment
- the process of increasing the capacity of individuals or groups to make choices and to transform those choices into desired actions and outcomes.
- Analytical Problem Solving
- The ability to identify and gather relevant information; to and interpret data and to recognize relationships, issues and obstacles to generate alternative course of action.
- Technical Competence
- The ability to understand and use technical information and to pocess the knowledge relevant to a process or organaization that enable the individual to communicate with technical specialists.
- Computer Literacy
- The level of facility an individual has with different types of hardware, software and systems.
- Negotiation Aptitude
- Negotiation Skills.
- Capital Budget
- The budget for buildings, equipment and other long term assets that are used for the OPERATION of the organization
- Zero-Based Budget
- A process that does not use past experience to determine future needs. The assumption is that the budget is prepared from scratch, ZERO BASED
- Cash-Flow Budget
- Links expenditures and cash requirements during the budgetary period. Funds are made available as expenditures are required
- Program/Project Budget
- often used for not-for-profit and governmental entities
- Open-to-Buy Budget
- Also called OTB budget, often used in the retail sector
- Commodity Segmentation
-
Dividing an organization's total spend into categories of goods and services; Acquisition-low risklow value
Critical-high risk/low value
Leverage-low risk/high value
Stragtegic-high risk/high value - Before-the-fact controls
- Measurable and based on business plans, forecasts, budgets and policies/prodecures
- During-the-fact controls
- Relate to quality and timing issues (scheduled due date or activity completion dates)
- After-the-fact controls
- Reviews to measure what actually happened as in audits, periodic reports and procedure reviews
- Centralization
- Buying for all sites at a central location. Authority and responsibility is with one central group
- Decentralization
- Giving each site full authority to conduct all of its purchasing activities
- Re-Engineering
- Redesign of processes to reduce cycle time and emphasize value-added activies
- Reason for Forms
- Communication
- Purchase price variance
- PPV is the difference between the standard price and the actual price paid during a budget period
- Periodic Review of Forms
- Should be reviewed at least annually
- Parity of Authority
- Matching the responsibilty with equal authority
- Line Relationship
- Must be a solid line from person to person on the organizational chart. Line does or directs.
- Staff Relationship
- Broken line from person to person on the organizational chart. Staff advises.
- Span of Control
- The number of people a manager supervises
- "Flat" Organization
- Indicates that one supervisor has a large number of people reporting to him or her
- Advantages of promoting from within
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1. Tends to keep morale high
2. Stimulates individual performace by offering advancement.
3. Reduces training costs - Disadvantages of promoting from within
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1. Results in a chain of lower-level promotions.
2. Produces in-breeding
3. Poor morale due to lack of not being selected - Advantages of recruiting/hiring outside
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1. Brings new ideas to the organization
2. Prevents substituting of seniority for management ability - Disadvantages of recruiting/hiring outside
- Training may be higher
- Federal Civil Rights Acts of 1964 - Title VII
- Makes it illegal to discriminate among employees on the basis of race, religion, color, sex or national origin - ALSO INCLUCDES SEXUAL HARASSEMENT
- Executive Order 11246 of 1965
- Prohibits discrimination in federal employment or an organization that has a government contract of subcontract.
- Age Discrimination Act of 1967
- Restricts employers of more than 20 employees in the public and private sector from discriminating in the employment and termination of individuals who are over 40 years old.
- Equal Employment Opportunity Act of 1972
- EEOA - Provides a series of amendments to Title VII expanding coverage to all organizations with 15 or more employees.
- EEOC - Equal Employment Opportunity Commission
- Has the power to directly file lawsuits against offending organizations and requires organizations to take "affirmative action."
- Affirmative Action
- Requires employers to take additional steps to attaract, retain, and develop skills of protected group members that the organization has a record of discriminating against.
- What determines appraisal factors
- Quality of work, Quantity of work, Knowledge of specific job activites, Cooperativeness, Dependability, Initiative, Accuracy, Adaptability and Attitude
- Quantitative Factors
- Are measurable and are objective
- Qualitative Factors
- Factors that are subjective
- Learn by Doing
- The employee is given general guidelines about what needs to be done and teaches themselves the nature of the job.
- Sponsor/Mentor System
- The assignment of a sponsor or "buddy" to a new employee. Sponsors should be chosen for their experience and teaching ability
- Classroom Training
- Initial training that consists of a series of brief clasroom courses dealing with team building, organizational culture, regulations, pruchasing processes and related activities.
- Functional Rotation
- Orientation method where a new employee is rotated through a series of brief assignments, both within purchasing and in other functions.
- Job Rotation
- A training method that advances an employee through a progressive series of purchasing assignments to gain well-rounded experience.
- Self-Training
- Professional development is acquired through carefully directed self-training.
- Americans with Disability Act
- The ADA prohibits discrimiation against people with disabilities. 1) the individual must be able to perform the "essential functions" of the job with or without reasonable accommodations.
- Quid Pro Quo
- Where a sexual favor is grated in return for some reward, or a refusal is attached to some punishment.