Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Commodity Buying
The practice of grouping like purchased items into common groups which are then managed by a single buyer / agent. This practice assumes that an individual who is more focused on a range of products or services can perform that function better than someone who is a novice.
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Competitive Dialogue
Competitive dialogue is a procedure introduced into the European Union public procurement system in 2004 to provide an improved method for awarding complex contracts, such as those for public infrastructure and major IT systems. The intent is to allow buyers and suppliers to collaborate on solutions.
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Competitive Pricing
The price paid for a product is based upon competitive bidding from a number of suppliers.
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Competitor
Someone who competes for your customers both in product and in geographical location.
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Compliance Checking
The functions of Electronic Data Interchange (EDI) processing software that ensures that all transmissions contain the mandatory information demanded by the EDI standard. Compares information sent by an EDI user against EDI standards and reports exceptions. Does not ensure that documents are complete and fully accurate, but does reject transmissions with missing data elements or syntax errors.
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Compliance Program
A method by which two or more trading partners periodically report conformity to agreed upon standards of control and audit. Management produces statements of compliance, which briefly note any exceptions, as well as corrective action planned or taken, in accordance with operating rules. Auditors produce an independent and objective statement of opinion on management statements.
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Competitive Bidding
A common method of selecting sources for contract awards. Suppliers interested in participating in the process are asked to submit information on prices and/or other specified elements. Major public sector purchases commonly are awarded on a sealed bid basis, with the law requiring that the award be made to the lowest responsive and responsible bidder. In private sector purchasing, competitive bids are usually solicited from several suppliers with the stated intention of selecting those organizations with which negotiations subsequently will be conducted to arrive at a final contract award decision.
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Competitive Differentiator
The ability to communicate what makes the company, product or service unique and to stand out from other companies, products or services within the marketplace.
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Competitive advantage
Putting an organisation in a strong position against their competition
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Compliance
The act of being in alignment with guidelines, regulations, and/or legislation. Being in compliance ensures that organizations are abiding by both industry regulations and government legislation, as well as ensuring that the organization is able to manage both compliance risk and pass a compliance audit. A balanced approach includes a study of contract compliance, regulatory (financial, product, trade and environmental) compliance and vendor compliance.
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Compliance Monitoring
A check done by the VAN/third party network or the translation software to ensure the data being exchanged is in the correct format for the standard being used.
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Component
Material that will contribute to a finished product but is not the finished product itself. Examples would include tires for an automobile, power supply for a personal computer, or a zipper for a ski parka. Note that what is a component to the manufacturer may be considered the finished product of their supplier.
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