2007's Purchasing Buzzwords
PurchTips edition #132
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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