Responsible purchasing refers to purchases made by a company that respects its social and environmental responsibilities.

Service that involves purchasing goods and/or services for a company.

Purchases of components (ingredients, packaging) included in the cost of production. 

They contribute to the smooth running of the company (energy).

Choice of suppliers, management of pricing conditions, deadlines, etc.

Responsible for one or more product categories (other term: category manager), and responsible for developing the purchasing strategy for these categories (provides guidance to local buyers).

Responsible for purchasing within a factory (multiple categories, one factory) and manages relationships with local suppliers.

BUDGET (detailed projection of all estimated income and expenses)

Procurement should be distinguished from purchasing.

Order and inventory management

All the elements (components) that make up a finished product. For example, the BOM for a car would be a list of all the components that make up the car.

Document managed by a procurement officer that allows orders (volumes) of products to be placed in accordance with the terms of a contract.

A set of several items (e.g., ingredients)

An organization that centralizes purchasing for other companies. By leveraging economies of scale, a purchasing group can obtain better commercial terms and pass on the benefits to its member customers.

Term corresponding to a product and mainly used in the field of mass distribution (examples: butter, chocolate, sugar, plastic, etc.).

Document drawn up between a buyer and a supplier specifying the terms and conditions of purchase: - Supplier details - Product and its specifications (specifications) - Volume - Price (with or without cost model, indexed or not) - Period of validity

In English, hedging means budgeting what you need to produce your products.

Delivered Duty Paid

Payment term with a supplier (DPF in French).

Delivery time for the product or performance of a service. 

Indicator that measures the rate of deliveries within the hour.

Purchasing function within the management committee. He/she defines (in collaboration with global buyers) the company's purchasing policy and ensures that it is implemented.

European item code for a given reference. It is used in industry and commerce to identify an item. 

Future estimates (volume, price)

Exchange rate between one currency and another

Future price defined by a market index

Positive or negative difference between two values 

They can be managed at the global or local level.

Price set with a supplier

Actual amount lost or gained compared to a budget/estimated scenario

"International Commercial Terms" refers to the rules and terms applied to international trade. For example: EXW (Ex Works) corresponds to the factory price.

Market index

Performance indicators, also known as KPIs (Key Performance Indicators), can be defined as a means of measuring results against defined objectives.

Last price paid

Delivery time by the supplier (calculated between the order date and the delivery date).

Smooth out the quantities ordered from a supplier over a given period (example: order of 1,200 tons over 1 year, 100 tons per month).

Economic place where supply meets demand. 

Prices expressed in three different currencies: - Purchase currency (I buy the commodity in USD) - Local currency (my factory is based in Canada, CAD) - Group currency (headquarters are located in France, EUR)

Raw material, for example: sugar

Several raw materials combined to create a product (example: chocolate is a mixture of several commodities, sugar, butter, cocoa)

Volume requirements and prices not covered by a contract

Confidentiality agreement in French. This is a legal document between two parties, intended to ensure the confidentiality of an exchange, a document, or a collaboration.

Document sent by a supplier to its customer in order to make a price proposal and present the price (response to a call for tenders).

Outsourcing is the act of externalizing (no longer performing internally) a service or job function.

All suppliers selected within a family or category that are capable of producing identical or equivalent parts.

Expenses incurred to cover damages (e.g., late delivery penalties)

All of the objectives and strategies that a purchasing department sets itself in order to serve the company's project.

List of categories, amenities, and suppliers

It can be expressed in several ways, with or without a cost model, indexed or not... - Cost model: breakdown of the final price of a product (commodity price, processing price, transport price, etc.) - Without cost model: the buyer has no visibility on the breakdown of the price (only the final price) - Indexed: depends on market fluctuations - Non-indexed: fixed price defined with the supplier

Prices defined according to indices

In English, procurement refers to supplies.

Projects implemented to reduce costs

In English, purchasing refers to buying.

In French, purchasing price variance refers to the difference between the actual purchase price of a product, component, or material and the standard price defined in the system.

Financial outlook for the second or third quarter (estimates)

Raw material or commodity (can be grouped together with the definition of commodity)

The relationship between a buyer and a supplier is unique, as it combines: - the need for trust (the buyer trusts the supplier to meet deadlines and deliver quality, for example) - an economic link (the supplier wants to be paid for its products and/or services)

Minimum stock to be used to cope with supply difficulties or production peaks.

Expense in French: (volume x price)

Explain the effects of actual spending compared to the budget/estimate.

Supplier

Performance monitoring and management tool that provides a comprehensive overview of the company's activity (collection of KPIs)

Percentage of coverage relative to production needs (example: I need 1,000 tons, I have contracted for 800 tons, I am 80% covered, and 20% remains to be covered).

Direct or Indirect

Operations carried out by the company on the raw material (transport, production, assembly, packaging, labeling, etc.).

Action to stay informed about supplier news, technological advances, innovations, etc. in order to reap the benefits.

The act of staying informed about a given market, its main players, its locations, etc., in order to gain an advantage.

Quantity purchased during a period.

Weighted average price (calculated by taking into account estimated or contracted volumes and estimated or contracted market prices).