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2013/2014  KAN-CM_SU9G  Introduction to Purchasing in a Globalized Market (Intensive)

English Title
Introduction to Purchasing in a Globalized Market (Intensive)

Course information

Language English
Exam ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Course period Summer
6 week course (3 weeks of classes, 3 weeks of exam). Please check www.cbs.dk/summer for the course schedule.
Time Table Please see course schedule at e-Campus
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Course instructor - Rolando Tomasini
    Patricia Plackett - Department of Operations Management (OM)
Main academic disciplines
  • Finance
  • Supply Chain Management and Logistics
  • Corporate and Business Strategy
Last updated on 25-01-2013
Learning objectives
  • Understand the impact and strategic importance of the procurement function for an organization
  • Gain an understanding of the relationship between purchasing, logistics and supply chain management, and learn how they interact in positive and negative ways for the organisation
  • Analyze the potential gains and challenges in recurring to sourcing abroad, especially in emerging countries
  • Develop a sense of market intelligence by analyzing the different economic and financial factors that impact cost and prices
  • Be able to evaluate a supplier profile (finance, and technical), performance (quality and relationship), and added value (strategic fit and partnership potential)
  • Be able to formulate a procurement strategy in line with the different objectives of a company
Course prerequisites
A basic understanding of supply chain management, logistics, and/or finance would be very helpful to students taking this course. Additional experience or interest in sales or manufacturing may also be an asset for class discussions.
Prerequisites for registering for the exam
Requirements about active class participation (assessed approved/not approved)
Mandatory Mid-term Assignments:
A group assignment will be given that incorporates the applications of the lessons learned from the readings, into the simulation that we will use in class. The groups will have a presentation on the final days of class with critical feedback to prepare them for the final exam.
Project/Home Assignment (Individually written), 15 A4 pages:
Examination form Home assignment - written product
Individual or group exam Individual
Size of written product Max. 15 pages
Assignment type Written assignment
Duration Written product to be submitted on specified date and time.
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer Term
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content and structure

This course is intended to provide students with an introduction to the increasingly important function of procurement. Through the different modules the students will understand the strategic role that purchasing can play to drive a firm's competitiveness and its links to the other main functions.
For a global overview we will review the basics of finance, marketing, legal and operations management that relate to purchasing. For example, we will review of series of key financial ratios that provide an insight to a supplier’s situation, apply them to a set of suppliers, discuss how they affect a negotiation, how they can be applied to contractual agreements (different clauses to consider in a negotiation), and finally how to link the analysis with the supply chain. Throughout the course we will also share some industry best practices in tendering, and sourcing from emerging countries, and the link to sustainable development in an increasingly globalized economy.
Exercises will be based on case studies, publically available financial reports, and industry reports all leading you to final project that will count for the totality of your grade.

  Lecture Topic Objective
1 Procurement: A Strategic Function Understand the impact procurement in the firm and how it fits with the different functions (marketing, finance, production, logistics, sales)
2 Finance Review some basics of finance related to procurement to analyze a supplier’s profile and determine the type of relationship the can be built with them
3 Costs and Indexing Familiarize with sources and use them to forecast their impact on cost and estimate future prices
4 LCC Discuss challenges and opportunities for working with emerging market suppliers
5 Portfolio and Category Management Guest Speaker - to provide practical experience from an organizations approach to managing suppliers
6 Supplier Relationship Management & Sustainable Purchasing Understand the emerging trend in the industry, its success and failures. Consider sustainable development and ethics as a part of the relation
7 Contracts Discuss different legal issues around formalizing the relationship with a supplier.
8 Tenders and Bidders Review best practices for the process of calling for tenders and reviewing bids from suppliers
9 Group Presentations In class exercise results from simulation
10 Review and Exam Provide an overview of the course and discuss exam content, logistics, and expectations

The course's development of personal competences:
Students in this course will learn to explore through quantitative and qualitative analysis the procurement function and its related disciplines (finance, sales, production, logistics, marketing). They will be asked to combine them and express them in a coherent manner for negotiations and board presentations.
Teaching methods
The course will be taught through a series of lectures, case studies and in-class individual/group exercises. In-class exercises will include evaluating financial reports of potential suppliers and their catalogues and prices. An industry guest speaker will be considered (pending availability) for an in-class presentation and panel discussion.

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings to be read before the start of classes with a related task or tasks in the first two classes in order to 'jump-start' the learning process. Students will be given a case study to read and prepare for the first lecture, in which it will be discussed and evaluated in groups.
Expected literature

Bensaou, M. (1999). Portfolios of buyer-supplier relationships. Sloan Management Review, 40(4), 35-44.
Brammer, S., Hoejmose, S., and Millington, A. "Managing Global Sustainable Supply Chains: A Review of the Body of Knowledge". Network for Business Sustainability 2011. pp. 1-73.
Brandmeier, R. A., & Rupp, F. (2010). Benchmarking procurement functions: Causes for superior performance. Benchmarking: An International Journal, 17(1), 5-26.
Brege, S., Brehmer, P. O., & Rehme, J. (2008). Managing supplier relations with balanced scorecard. International Journal of Knowledge Management Studies, 2(1), 147-161.
Burt, D. N. (1985). Procurement: Academia's stepchild. Journal of Marketing Education, 7(3), 30.
Dolan,T. and Fedele, K. (2004). Strategic Sourcing: Reducing Cost and Supporting Diversity Goals. 89th Annual International Supply Management Conference, April 2004. pp. 1-6.
Dubois, A., & Araujo, L. (2007). Case research in purchasing and supply management: Opportunities and challenges. Journal of Purchasing and Supply Management, 13(3), 170-181.
Duffy, R., & Fearne, A. (2004). The impact of supply chain partnerships on supplier performance. International Journal of Logistics Management, the, 15(1), 57-72.
Ellram, & Perrot Siferd. (1993). Purchasing: The cornestone of the total cost of ownership concept. Journal of Business Logistics, 14(1), 163-184.
Ellram, L. M. (1995). Total cost of ownership: An analysis approach for purchasing. International Journal of Physical Distribution & Logistics Management, 25(8), 4-23.
Falasca, M., & Zobel, C. W. (2011). A two-stage procurement model for humanitarian relief supply chains. Journal of Humanitarian Logistics and Supply Chain Management, 1(2), 151-169.
Gentry, Julie. (1996). The role of carries in the buyer-supplier strategic partnerships: A supply chain management approach. Journal of Business Logistics, 17(2).
Gocke, A., Lang, N., Lee, D., Mauerer, S., Pandey, A. "Bringing Under-Performing Suppliers" Supply Chain Management Review. Jan/Feb 2011. Pp. 38-44.
Gocke, A., Lang, N., Lee, D., Mauerer, S., Pandey, A. "Supplier Development: Bonanza or Burts". BCG Report, March 2011. pp. 3-13
Humphries, A. S., & Wilding, R. (2001). Partnerships in UK defense procurement. International Journal of Logistics Management, the, 12(1), 83-96.
Krajlic, P. (1983) 'Purchasing must become supply chain management', Harvard Business Review, No. 5.
Lemke, F., Goffin, K., & Szwejczewski, M. (2003). Investigating the meaning of supplier-manufacturer partnerships: An exploratory study. International Journal of Physical Distribution & Logistics Management, 33(1), 12-35.
Pagell, M., Wu, Z., & Wasserman, M. E. (2010). Thinking differently about purchasing portfolios: An assessment of sustainable sourcing. Journal of Supply Chain Management, 46(1), 57-73.
Reuter, Foerstl, Hartmann, & Blome. (2010). Sustainable global procurement management: The role of dynamic capabilities in achieving competitive advantage. Journal of Supply Chain Management, 46(2).
"Value of Sustainable Procurement Practices. A quantitative analysis of value drivers associated with Sustainable Procurement Practices". Presentation by INSEAD, EcoVadis, and PriceWaterhouseCoopers. 2010. P1-28.
Vodafone Code of Ethical Purchasing (Version 2.0). pp. 1-6.
Wisner, J. D., & Tan, K. C. (2000). Supply chain Management and its impact on purchasing. Journal of Supply Chain Management, 36(4), 33-42.

Last updated on 25-01-2013