Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Order-to-Pay Solutions
Systems that are used to manage the ordering process, ranging from requisition, to ordering, supplier delivery and payment
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Organizational alignment
The creation of relationship and communication mechanisms that enable a company and the service provider to work together effectively to achieve the mutually defined desired outcomes.
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Outcome-Based Economic Model
An economic model in which a supplier is paid for the realization of a defined set of business outcomes, business results, or agreed-on key performance indicators. An outcome-based model typically shifts risk to the supplier for achieving the outcome, but requires both a buyer and supplier to work together to achieve the outcome. A well-structured agreement compensates a supplier's higher risk with a higher reward. See also Outcome or Outcome-Based Metric.
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Outcome-focused specification
Type of performance specification that describes the functions or performance that a product must fulfil
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Ordering system
A method used to determine the size and timing of an organisation’s orders
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Organisational culture
The shared values and beliefs that influence how people in an organisation behave
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Original equipment manufacturer (OEM)
A manufacturer that produces goods for another company to sell under their own branding, particularly computer and IT equipment
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Outcome
Achievement of economic or strategic value as the result of doing something. Often an outcome can only be achieved when multiple parties work together collaboratively. As such, outcome-based thinking incorporates an end-to-end perspective.
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Outcome-Based Metric
A measure typically defined by a formal Service Level Agreement to measure the success of a buyer and a supplier's ability to achieve an outcome. Example: Machine Reliability or Spare Parts and Consumables Inventory Optimization.
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Output
Achievement of a well-defined and easily measured event or a deliverable that is typically finite in nature. An output typically relates to the purpose/functionality of the good or service instead of the activities or inputs needed to create the good or service. Outputs can be achieved by a supplier without help from a buyer. However, often a buyer has inputs to a supplier. As such, output-based metrics/service level agreements should only be based on what is in a supplier's control.
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