Procurement Terms



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Make v Buy
Make-or-Buy, sometimes referred as outsourcing, is a decision on whether to manufacture a product in-house or to buy from an external supplier. The decision considers the costs and benefits of doing in-house or externally and comparing the two. The final decision of a Make v Buy should scrutinize both the total cost and wider strategic business benefits. Whilst the wider strategic benefits may be difficult to quantify, they often are the considerations that have the most weight.
Category Management Sourcing
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Maverick Spend

Maverick spend, sometimes Rogue Spending, Non-compliant Purchasing, Off-contract Buying, Ad-hoc Purchasing or Independent Sourcing, refers to the practice of purchasing goods or services outside of the established procurement policies, procedures, and controls of an organization. This can include purchases made without proper authorization, outside of approved supplier contracts, or without the use of preferred suppliers.

Maverick spend can lead to a range of negative outcomes for an organization, including higher costs, reduced process efficiency, decreased compliance, and increased risk. When purchases are made outside of the established procurement process, it can be difficult for procurement professionals to manage supplier performance effectively, negotiate favorable pricing, or identify opportunities for cost savings.

To address maverick spend, organizations typically implement policies and procedures to promote compliance with procurement policies, and specialized software to help monitor and manage procurement activities. This can include the use of spend analytics, supplier management systems, and e-procurement platforms to streamline the procurement process and improve visibility into purchasing activities.

By reducing maverick spend and increasing compliance with procurement policies, organizations can improve their financial performance, reduce waste and inefficiency, and better manage risk.

Risk Management Spend Analysis
Minimum Order Quantity (MOQ)
Minimum order quantity (MOQ) is the minimum quantity of goods or products a supplier is willing to sell or requires a buyer to purchase in a single order. It is a common practice used in procurement and supply chain management to ensure that suppliers can meet their production requirements while also achieving economies of scale.
Most Desired Outcome (MDO)

In the context of a negotiation, the Most Desired Outcome (MDO) refers to the ideal or optimal result that a party hopes to achieve. It is the best possible outcome that the party can envision and is often used as a benchmark against which other potential outcomes are measured. The MDO is generally kept in mind by the negotiating party throughout the negotiation process and is used to guide the party's strategy and decision-making.

Identifying the MDO is important as it helps clarify the negotiating party's priorities and goals and provides a clear understanding of what is at stake in the negotiation. Once the MDO is established, the negotiating party can use it as a reference point to assess the viability of potential agreements, concessions, or compromises. Ultimately, the goal of a negotiation is to secure an outcome that is as close as possible to the MDO while also considering the other party's interests and objectives.

Negotiation Sourcing Supplier Management