When a warehouse is required to combine multiple products into new product kits, the act of pulling these pieces together is called kitting. This process results in faster field processes by having the exact number of “pieces” available for installation, reduces loss and inventory and can be bundled into kits by manufactures as a value added service.

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow of cash from the obligated company

Process of locating, collecting, and refining knowledge and converting it into a form that can be further processed by a knowledge-based system.

An easy, logical way to segment suppliers in a 2 x 2 matrix based on risk and profit impact

Structured process of imparting pre-existing or acquired information to a team or a person, to help them attain a required level of proficiency in skill.

Knowledge process outsourcing (KPO) is when complex expert services are performed by workers in a different company which e country or in an offshore location to save cost. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions-typically those that are easily undone if they conflict with the objectives or policies of their customer, the outsourcing company.

A four-box matrix that reflects the segmentation of spend based on an assessment of the value of the spend (X-axis) relative to the market risk to acquire (Y-axis). The matrix typically includes four quadrants: acquisition or non-critical.

A contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

The decision concerning whether to contract for the possession and use of an asset owned by another party for a period of time, in return for lease payments, as opposed to purchasing the asset.

A term that used to describe that state when the vendor is only providing the services in the same manner that the customer provided them. Along with legacy services is the term legacy service levels. This is saying that the vendor is going to provide the services at basically the same level of service that the customer was providing prior to the outsourcing. This makes sense because the vendor is not going to be able to provide a higher level of services if it’s really only doing the same thing the customer was doing prior to the outsourcing.

One of the four Kraljic Matrix quadrants. In general, these are the products that can be obtained from various suppliers at standard quality grades. They represent a relatively large share of costs and are bought in large volumes.

Life Cycle Costs are defined as the sum of the fees and indirect costs in the purchase of a commodity, service or technology. Life Cycle Costing is used for procurements that involve the expenditure of funds for both the fees associated with the services to be procured (price) and costs associated with the introduction of the services into the environment (indirect costs). An example of the application of the Life Cycle Cost evaluation is the sum cost of the acquisition of a new computer environment (offer price) and the cost of a loansolution.com/payday-loans-mi systems conversion necessitated by the installation of a new computer environment (indirect costs). These are also sometimes referred to as Total Cost of Ownership.

The sum of all costs incurred during the lifetime of the product or service contract, including: design, storage, maintenance, transportation, material handling, purchase cost, operational performance, disposal, distribution, obsolescence and damage.