Sourcing and Procurement 

Glossary

Your trusted guide to exploring sourcing and procurement terms & definitions,

from the world’s leading procurement experts and companies.

"BRAND NAME OR EQUAL" SPECIFICATION

A specification that uses one or more manufacturers brand names or catalog numbers to describe the standards of quality, performance and other characteristics needed to meet the requirements of a solicitation and provide for the submission of equivalent products.

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3-Way Match

A process where the purchase order is compared against the supplier's invoice and the receiving report. A good 3-Way Match compares quantities, price, and terms appearing on the supplier's invoice to the information on the purchase order and to the quantities actually received.

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80-20 Rule

See the Pareto Principle

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ABC classification

A system of prioritising different types of inventory based on their value or importance to the business

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ACQUISITION

The act of acquiring goods and services (including construction) for the use of a governmental activity through purchase, rent, or lease. Includes the establishment of needs, description of requirements, selection of procurement method, selection of sources, solicitation of procurement, solicitation for offers, award of contract, financing, contraction administration, and related functions.

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ADVERTISE

To make a public announcement of the intention to purchase goods, services or construction with the intention of increasing the response and enlarging the competition. The announcement must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the public.

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2 in a Box

See Peer-to-Peer Interface Structure.

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4th Party Logistics (4PL) or Logistics Outsourcing

Logistics Outsourcing (4PL) can be defined as the strategic use of outside parties (business independency) to perform activities traditionally handled by internal staff and resources. Allyn allocates resources to your company in order to manage your supply chain. We work as an extension of your company, exercising your strategy and driving your initiatives. Our objective is to lead your business to logistics best practices, providing logistics expertise & consultancy support, optimizing your processes and your supply chain.

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ABC Analysis

Applications of Pareto's Law or the 80/20 rule. ABC analysis, as related to inventory, is simply a determination of the relative ratios between the number of items and the dollar value of items purchased repetitively for stock. Typically 5-10% of the items ( "A " items) account for 75-80% of the investment, 20-25% of the items ( "B " items) account for 15-20% of the investment, and 70-75% of the items ( "C " items) account for 5-10% of the investment. Inventories should be managed accordingly, with more emphasis placed on the strategic management of the "A " items.

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ACCEPTANCE

The act of accepting by an authorized representative; an indication of a willingness to pay; the assumption of a legal obligation by a party to the terms and conditions of a contract.

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ADDENDUM

An addition or supplement to a document; e.g., items or information added to a procurement document.

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AGREEMENT

A duly executed and legally binding contract; the act of agreeing.

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