Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Output-Based Economic Model
An economic model in which a supplier is paid for achieving a pre-specified output-based metric. An output-based model shifts risk to the supplier for achieving the output, but requires both a buyer and a supplier to work together to achieve the outcome. A well-structured agreement compensates a supplier's higher risk with a higher reward. See also Output or Output-Based Metric.
Source:
Outsourcing Arrangement
Contractual arrangement between two or more organizations for the provision of specific services where one organization (the buyer) is the client for services and another organization (the supplier) is the provider of the service.
Source:
Outsourcing Governance Framework
Outline of guidelines and processes that enables continual monitoring and management of outsourcing arrangements to sustain value delivery between client and provider.
Source:
Over-spec’d (over-specified)
Having a specification that is better than is required to be fit for purpose
Source:
Output-Based Metric
A measure typically defined by a formal Service Level Agreement to measure the success of a supplier's ability to achieve an output. Example: Unplanned Machine Downtime.
Source:
Outsource/Outsourcing
A sourcing strategy, outsourcing is the transferring of a process or function to an external provider. Organizations can outsource any workscope. Popular workscopes to outsource includes non-core competencies such as warehouse and logistics, facilities management, call center/customer support and IT as well as back office functions such as finance administration, claims processing, benefits management.
Source:
Outsourcing Governance
A joint set of structures and processes that are implemented to ensure effective leadership and management, which enables an outsourcing agreement to achieve its joint objectives within the framework of agreed values.
Source:
Outsourcing Model
Formalized concept of the scope of an outsourcing arrangement and how it is structured and carried out. Organizations can use any of the seven sourcing business models to procure outsourced services.
Source:
Over-supply
Where more goods or services are available than there are buyers for them. This most often occurs in agriculture where the harvest may vary from year to year, depending on the weather, and the produce cannot be kept for a long time
Source:
Overspecifying
A situation in which technical requirements are imposed on suppliers that are not necessary for the functionality of the product or the delivery of the service. Overspecification is usually caused by Junkyard Dogs.
Source: