Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Tier 1, 2, or 3
tier 3 suppliers, sell their products or services to tier 2 who sell their products or services to tier 1 organization. Terminology used in the automotive industry, but also may be used for any company that buys.
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Tiers, Number of
The number of locations or times a product is handled.
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Title
The instrument or document whereby ownership of property is established.
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Tort
A wrongful act, other than a breach of contract, such that the law permits compensation of damages.
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Total Cost Analysis
The use of a standard process for breaking down, examining and evaluating the cost structure of a purchased product or service; it is also an evaluation of actual or anticipated cost data (material, labor, overhead, general and administrative, and profit) of a certain product or service against expectations for those costs, and finally it is the utilization of relevant experience, knowledge and judgment to financial data to project reasonable estimated delivered costs for comparison against actual, supplier-provided costs.
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Total cost approach
An approach that considers all the costs associated with procuring an item
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Tiered Governance structure
A formalized mechanism for decision making (both escalations and approvals). A three-tier approach is often used in more complex and strategic relationships with an "operational", a "management" and an "executive" level. A process that provides an opportunity to assess multiple providers' cultures, mindsets, and willingness to engage in a collaborative Performance-Based or Vested relationship.
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Tooling
Cutting tools, moulds, fixtures of accessories needed on a machine to manufacture a product
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Total Cost
Sometimes called "all-in costs. " In purchasing, total cost generally includes the price of the purchase and transportation cost, plus indirect handling, inspection, quality, rework, maintenance, incremental operations, and all other "follow-up " costs associated with the purchase.
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Total Quality Management (TQM)
The integration of management techniques, improvement efforts, and technical tools which focuses on continuous process improvement activities involving everyone in both the buying and supplying firms. An integrated effort toward improving quality performance at every level.
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Total cost of ownership (TCO)
A structured approach to calculating the full costs associated with buying and using an asset or acquisition over its entire life cycle
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