Procurement Fundamentals
This standard procurement process typically includes need recognition, specification, supplier search, RFP/RFI, bid evaluation, contract award, and post-award administration.
What is Procure-to-Pay (P2P) process?
This sourcing approach purchases goods or services from a single preferred supplier to secure stability and volumes.
What is single-sourcing (sole-source procurement)?
This document is generated to authorize a supplier to deliver goods or services.
What is a Purchase Order (PO)?
This contract type provides an indefinite quantity of suppliers or services during a fixed period, with task orders issued as needs arise.
What is an IDIQ contract? (Indefinite Delivery, Indefinite Quantity)
This is the process of evaluating and selecting suppliers based on quality, cost, and delivery performance.
What is evaluation?
This term describes the overall value from a purchase, not just the price paid.
What is total cost of ownership (TCO)?
This method invites multiple suppliers to compete by submitting proposals, typically after issuing a request for proposals?
What is competitive bidding (RFP-based sourcing)?
This financial Document requests payment for goods or services received, often referencing a PO and invoice line items.
What is an invoice?
This agreement type sets terms and prices for multiple future purchases with a supplier, streamlining repeated acquisitions.
What is a Master Services Agreement (MSA)?
This term describes a collaborative approach to working with key suppliers to improve performance and innovation.
What is strategic supplier partnership?
This legal document binds a seller to deliver specified goods or services at agreed terms.
What is a contract?
This approach combines requirements from multiple internal users or departments to leverage volume and standardization.
What is aggregation/centralized sourcing?
This Ariba process matches a supplier's invoice to the related PO and receiving document to ensure payment accuracy.
What is three-way matching (PO, invoice, receipt)?
This contract type is used to outline group purchasing arrangements between organizations to leverage buying power.
What is a a cooperative purchasing agreement?
This document outlines the terms, expectations, and performance metrics agreed upon between a buyer and a supplier.
What is a supplier Contract or Service Level Agreement (SLA)?
This activity involves identifying needs within an organization and determining the right quantity and timing of purchases.
What is demand management?
This sourcing type bypasses internal procurement and purchases directly from a supplier, often used for urgent or internal standardization benefits.
What is sport buying (off-contract purchasing)?
This Ariba capability enables you to leave the purchasing system to shop on a suppliers external catalog and then return the selected items to Ariba to complete the transaction?
What is Ariba punchout?
This separate document authorizes a specific modification to the scope, price, or timeline of a contract without changing the original terms.
What is a change order?
Regular meetings and communication with suppliers to review performance and resolve issues are part of this ongoing process.
What is Supplier Performance Management?
This category of spend includes direct materials and components that become part of the finished product?
What is direct spend (direct materials)?
This stage occurs near the end of a competitive process where suppliers submit their Best and Final Offers after initial evaluations.
What is BAFO?
This type of purchase in Ariba is crated when spending needs to be fulfilled outside of the supplier's catalog, or contract, often using manual lines items or services descriptions.
What is a non-catalog PO?
This legal mechanism transfers one party's legal rights and obligations under an existing contract to a new party, with all original terms generally remaining in place.
What is a novation?
This approach involves building long-term, mutually beneficial relationships with key suppliers through trust and collaboration.
What is supplier relationship management?