Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Benchmark
A measure, reference or standard for comparison; this performance level is recognized as the standard of excellence or target for a specific business process. Any metric that is being used to compare actual performance against.
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Best Practices
Best practice is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have been proven over time in a variety of circumstances. Best practices vary by industry or geography depending on the environment being used. Best practice methodology may be applied with respect to resources, activities, cost object, or process.
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Bid
A bid is an offer by a vendor to sell or an offer from a customer to buy.
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Bid Opening
In a sealed bid, this is when bids are revealed for the first time. This is a defined and controlled process, as it may be subject to a public process when the bid is issued by government.
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Before-the-Facts Controls
Controls that are put in place before activities are executed. They include budgets, plans, forecasts, and procedures.
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Benchmarking
The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance. Benchmarking seeks to improve any given business process by exploiting "best practices" rather than merely measuring the best performance. Best practices are the cause of best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage. There are seven types of benchmarking: performance, best-in-class, strategic, process, functional, operational and price/cost.
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Best Fit
A sourcing solution that can effectively harmonize dynamic business requirements with evolving market forces.
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Best Value
The best possible outcome from a procurement process that gets the right balance between price and quality. An assessment that bases pricing decisions on the value associated with the benefits received, not on the actual prices or cost. It uses decision criteria that go beyond costs and include decisions on work scope and pricing based on intangibles such as market risks, social responsibility, responsiveness, and flexibility.
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Bid Evaluation
Evaluation of the provisions of the bid, usually for the purpose of comparing the strengths and weaknesses of the various bids received. Although some organizations use a bid-analysis form to assist in analyzing bids or proposals, there is no uniform practice.
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Bidder (or tenderer)
A potential supplier who makes an offer (a bid is an offer or tender)
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