PURCHASING AND SUPPLY CHAIN MANAGEMENT Fourth Edition Robert M. Monczka Arizona State University and CAPS Research Robert B. Handfield North Carolina State University Larry C. Giunipero Florida State University James L. Patterson Western Illinois University Australia Brazil Japan Korea Mexico Singapore Spain United Kingdom United States S N L E4575-Monczka_Fm_Rev1 6/13/08 12:43:37am 1 of 30 cyan = PMS3292 Purchasing and Supply Chain © 2009 South-Western, a part of Cengage Learning Management, 4e Robert M. Monczka, Robert B. Handfield, ALL RIGHTS RESERVED. No part of this work covered by the copyright Larry C. Giunipero, James L. Patterson herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, VP/Editorial Director: Jack W. Calhoun information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright VP/Editor-in-Chief: Alex von Rosenberg Act, without the prior written permission of the publisher. Sr. Acquisitions Editor: Charles McCormick, Jr. Developmental Editor: Bryn Lathrop For product information and technology assistance, contact us at Marketing Comm. Manager: Libby Shipp Cengage Learning Academic Resource Center, 1-800-423-0563 Marketing Manager: Kristen Hurd For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Marketing Coordinator: Gretchen Wildauer Further permissions questions can be emailed to Content Project Manager: Scott Dillon [email protected] Manager of Technology: John Barans Technology Project Manager: John Rich Prod. Technology Analyst: Adam Grafa Library of Congress Control Number: 2008926725 Sr. Manufacturing Coordinator: Diane Gibbons Student Edition ISBN-13: 978-0-324-38134-4 Student Edition ISBN-10: 0-324-38134-4 Production Service: Newgen–Austin Art Director: Stacy Jenkins Shirley South-Western Cengage Learning Cover Designer: Joseph Pagliaro 5191 Natorp Boulevard Mason, OH 45040 USA Cengage Learning products are represented in Canada by Nelson Education, Ltd. For your course and learning solutions, visit academic.cengage.com Purchase any of our products at your local college store or at our preferred online store www.ichapters.com Printed in the United States of America 1 2 3 4 5 6 7 12 11 10 09 08 S N L E4575-Monczka_Fm_Rev1 6/13/08 12:43:38am 2 of 30 cyan = PMS3292 To Shirley, Kathleen, Thomas, and Elliana ROBERT M. MONCZKA To Sandi, Simone, and Luc ROBERT B. HANDFIELD To Tressa, Jan, Matthew, Michael, and Amanda LARRY C. GIUNIPERO To Diane, Lindsay, Karl, Drew, and Seth JAMES L. PATTERSON S N L E4575-Monczka_Fm_Rev1 6/13/08 12:43:38am 3 of 30 cyan = PMS3292 Brief Contents Preface xxiii Part 1 Introduction 1 Chapter 1 Introduction to Purchasing and Supply Chain Management 2 Part 2 Purchasing Operations and Structure 35 Chapter 2 The Purchasing Process 36 Chapter 3 Purchasing Policy and Procedures 85 Chapter 4 Supply Management Integration for Competitive Advantage 110 Chapter 5 Purchasing and Supply Chain Organization 153 Part 3 Strategic Sourcing 187 Chapter 6 Supply Management and Commodity Strategy Development 188 Chapter 7 Supplier Evaluation and Selection 233 Chapter 8 Supplier Quality Management 271 Chapter 9 Supplier Management and Development: Creating a World-Class Supply Base 306 Chapter 10 Worldwide Sourcing 343 Part 4 Strategic Sourcing Process 381 Chapter 11 Strategic Cost Management 382 Chapter 12 Purchasing and Supply Chain Analysis: Tools and Techniques 423 Chapter 13 Negotiation 459 Chapter 14 Contract Management 496 Chapter 15 Purchasing Law and Ethics 538 Part 5 Critical Supply Chain Elements 583 Chapter 16 Lean Supply Chain Management 584 Chapter 17 Purchasing Services 621 Chapter 18 Supply Chain Information Systems and Electronic Sourcing 665 Chapter 19 Performance Measurement and Evaluation 705 S N L iv E4575-Monczka_Fm_Rev1 6/13/08 12:43:38am 4 of 30 cyan = PMS3292 Brief Contents v Part 6 Future Directions 741 Chapter 20 Purchasing and Supply Strategy Trends 742 Cases 769 Case 1 Avion, Inc.