Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Service credits
A deduction against fees payable as compensation for poor service, usually a pre-determined percentage derived from a contractual performance management framework
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Service sector
The third of three sectors recognised by economists. The first sector covers farming and raw materials, the second is manufacturing and the third covers the production and delivery of services
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Services Procurement
The buying and managing of strategic outsourcing and consultancy (procurement of services from a third-party supplier). Contingent labor makes up a large portion of services spend for many companies. Typically a SOW is used to define the services required for purchase.
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Shared Services Sourcing Model
A Shared Services model is one of two investment-based categories; it is constructed as an internal organization typically based on an arm's-length outsourcing arrangement. A shared services model creates an internal functional business unit or a stand-alone entity that provides goods or services to an overall broader organization. Think of a shared services model as an entity that creates its own internal supplier and outsources to itself.
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Shared Vision Statement
The statement that sets forth the larger, guiding principles for the business relationship and the purposes for relationship. A shared vision statement is an essential element of a Vested Sourcing Business Model.
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Shift
A change in either the quantity supplied, or the quantity demanded while the price remains the same
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Service level agreement (SLA)
An agreement between a supplier and a buyer based on quality, delivery, availability and other measurable criteria
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Services
Unless otherwise indicated, both professional or technical services and service performed under a service contract. Pricing is usually collected via a Request for Proposal and includes a Scope of Work, Statement of Work or other documentation to explain the services needed and how delivery will be measured.
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Seven Step Strategic Sourcing Process
An organized approach or method that allows a supply chain function to systematically work on spend areas or processes that can result in cost saving benefits. Many organizations have adopted strategic sourcing processes that typically span from 5 to 8 steps. Also referred to as the Sourcing Cycle.
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Shared Value
A mutual commitment to establish economic benefits for all parties. In essence, shared value thinking involves entities working together to bring innovations that benefit them through a conscious effort to gain (or share) in the rewards. This shared value thinking is what the University of Tennessee researchers have named "what's in it for we" (WIIFWe).
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