Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Peer-to-Peer Interface Structure
A decentralized communications model where peers are "mapped". In a buyer-supplier relationship each have "peer roles" for joint accountability and problem solving. For example, a commercial manager for the buyer would have a commercial manager she would work directly with at the supplier. Roles are clearly delineated and do not overlap in order to avoid duplication of effort and/or micromanagement from the supplier. The buyer and supplier work to support each other where they "win together" and "lose together". The concept greatly improves collaboration between a buyer and supplier. Also sometimes referred to as "2 in a Box" and "Reverse Bow Tie ".
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Perfect competition
A market structure where many companies are competing, each selling the same product.
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Performance Based Logistics (PBL)
Originally a U.S. Government program term primarily in the aerospace and defense sector, PBL describes the purchase of assets with a complete package of services and support as an integrated, affordable, performance package designed to optimize system readiness and meet performance goals for a weapon system through long-term support arrangements with clear lines of authority and responsibility. PBLs are designed to optimize system readiness and meet performance goals for a weapon system through long-term support arrangements with clear lines of authority and responsibility. PBLs typically use a Performance-Based Sourcing Business Model. They can be structured as a Vested model.
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Performance Bond
A contract of guarantee, executed subsequent to award by a successful vendor to protect the buyer from loss due to the vendor's inability to complete the contract as agreed.
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Performance Guarantees
Supplier guarantees the actual output or outcome of the work to be delivered. Most often associated with Performance-Based and Vested Sourcing Business Models.
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Peak of Inflated Expectations
Early publicity produces a number of success stories%u2014often accompanied by scores of failures. Some companies take action; most don't.
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Penalty Provision
Provision in a contract that imposes a specified sum on the defaulting contracting party for a specified default. Penalty clauses are most often associated with Performance-Based agreements where a supplier gives the buyer a refund when they do not meet an SLA. Sometimes also referred to as service credits or malice payments.
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Performance Based/Managed Services Model
A formal longer-term supplier agreement that combines a relational contracting model with an Output-Based Economic Model. A Performance-Based model drives supplier accountability for output based service level agreements (SLAs) and/or cost reduction targets. A Performance-Based agreement typically creates incentives (or penalties) for hitting (or missing) performance targets.
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Performance Goals
Goals and objectives against which employees (PPA) or suppliers (SPP) are measured.
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Performance Measurement
A management technique for evaluating the performance of a particular function or person.
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