2007's Purchasing Buzzwords

PurchTips - Edition # 132 August 7, 2007

By Charles Dominick, SPSM

Are You Familiar With These Purchasing Buzzwords?

Compliance – Compliance is such a popular word in purchasing that it is used to describe many different things:

• Ensuring that end users purchase goods and services from the organization’s contracted suppliers and not their non-contracted competitors
• Ensuring that suppliers perform their obligations in accordance with their contracts, specifically with regard to charging the correct price
• Ensuring that all processes are performed as prescribed by certain applicable laws (such as the Sarbanes-Oxley Act in the United States)

Lean Six Sigma – Lean Six Sigma can be simplified as a business improvement strategy that combines two strategies once thought to be competing: Lean and Six Sigma. Lean is characterized by a focus on the reduction of waste – wasted time, wasted effort, wasted money, etc. Six Sigma is a data driven effort to eliminate variations in processes so as to achieve near-perfect quality. Lean Six Sigma combines elements from each methodology to focus on ensuring that processes are designed to minimize waste and variation, be fast, and produce defect-free products and services.

Sustainability – While sustainability is a relatively new term, it refers to an old principle that will endure longer than any nomenclature assigned to it: adopting environmentally-friendly business practices. Sustainable purchasing actively seeks to make purchasing decisions that are more environmentally friendly, for example:

• Buying recycled or recyclable products
• Buying products that consume less energy or other natural resources
• Working with suppliers to identify and reduce pollutants in the products they buy
• Establishing programs where the end consumer can return what would otherwise be considered waste and it can be routed back through the supply chain to be reused

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