Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Offshoring
The practice of moving domestic operations such as manufacturing to another country as a way to lower costs, avoid taxes, etc. It may or may not involve transferring employees. In many cases, organizations outsource to a supplier who then offshores the work. Offshoring is particularly common in outsourced IT and Business Process Outsourcing (BPO) workscopes.
Source:
Open Book
An agreement in which the buyer has the right to see exactly what the suppliers expenses are. In a Vested Sourcing Business Model often the buyer and supplier both use an open book approach in order to best calculate a true Total Cost of Ownership.
Source:
Open-book contract
A contract in which both the purchaser and supplier share all financial information relating to the contract, including figures that would normally be considered commercially confidential
Source:
Operating Expenditures (OpEx)
Expenditures required for the day-to-day functioning of the business, such as wages, utilities, maintenance and repairs. These expenses also include depreciation of plants and machinery which are used in the production process.
Source:
Officers
Positions appointed by the Board of Directors. Examples of officers are CEO (chief operating officer) and FO (financial officer)
Source:
Onboarding
Refers to the mechanism through which new employees acquire the necessary knowledge, skills, and behaviors to become effective organizational members. Tactics used in this process include formal meetings, lectures, videos, printed materials, or computer-based orientations to introduce newcomers to their new jobs and organizations. Research has demonstrated that good socialization techniques lead to positive outcomes for new employees such as higher job satisfaction, better job performance, greater organizational commitment, and reduction in occupational stress and intent to quit. Onboarding techniques can and should be applied to ramp up new suppliers.
Source:
Open account
This is an arrangement where the items are delivered before payment is due, for example, on credit terms such as 30 days
Source:
Opening stock
The amount, type and value of goods available for sale at the beginning of a set period
Source:
Operating costs
Day-to-day expenses of running an organisation, e.g., rent, salaries, transport costs, power and insurance
Source: