Page 116 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 5: Procurement and Manufacturing Strategies

Manufacturing: Manufacturing is the production of goods for use or sale using labour and Notes
machines, tools, chemical and biological processing, or formulation.
Procurement Strategy: Long-range plans for ensuring timely supply of goods and/or services
that is critical to a firm’s ability to meet its core business objectives.
Sourcing Strategy: Sourcing strategy deals with planning, designing and building a reliable and
competitive supplier base.
Sourcing: It is a standard and formal process that incorporates ongoing analysis to evaluate the
right mix of tools and technologies to improve right supplier generation and management and
also reducing the total cost.
Supplier: Suppliers are people or businesses that provide goods and services to vendors.
Third Party Logistics Provider (3PL): It is defined as the services offered by a middleman in the
Logistics Channel that has specialized in providing, by contract, for a given period, all or a
considerable number of the logistics activities for other firms.

Value Engineering: Value engineering is a concept that involves closely examining material and
component requirements at the early stage of product design to ensure that a balance of lowest
total cost and quality is incorporated into new product design.
Value Management: Application of value analysis (value engineering) techniques for
improvement of business effectiveness and efficiency.

5.7 Review Questions

1. Discuss Supplier Operational Integration.
2. Define Value Management with the help of example.
3. Do you think that value engineering is a concept that involves closely examining material
and component requirements? If yes, give reason.
4. Highlight the three levels of outsourcing.
5. How is a 3PL distinguished from a Transportation Provider?

6. What are the types of 3PL providers?
7. Throw some light in the advantages and disadvantages of Outsourcing to 3PL.
8. Write brief note on Fourth Party Logistics Provider (4PL).
9. Define manufacturing strategy.
10. Explain the objectives of manufacturing.

11. What do you understand by manufacturing strategy?
12. Discuss the Manufacturing strategy will be related to three adjacent concepts.

Answers: Self Assessment

1. Procurement 2. Buyers
3. Operational 4. Logistical

5. True 6. False
7. True 8. False

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