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Bill of Material - Document which conveys product structure and component information for a given end item (assembly). It is used to determine how to build a product. More.
AML - See Approved Manufacturer List
Approved Supplier List - Specifies who may supply the components produced by qualified manufacturers. More.
ASL See Approved Supplier List
BOM See Bill of Material
CM See Contract Manufacturer
Delivery Quote - The question here is not the price, but when can you deliver or can you deliver before our normal lead time? Usually a purchase agreement has been established between the two trading partners when using a delivery quote.
Meet Competition Quote - Used to designate a meet competitor pricing ("meet comp") or delivery quote. This quote is the more complex of the quote types. A meet comp quote is used by the buyer to inquire to a supplier if he/she is willing to lower his/her price, or make a delivery to make a sale. This is used primarily between a distributor and a supplier. The distributor is asking the supplier to lower its price in-line with another supplier of a comparable product to make the sale. This may be after the product has already been shipped to the distributor. This is more complex because of the transaction interaction that is described in Implementation Recommendations for Quote Processes. It may require information about who is the competition, what is their price, and how can their price be verified. The special authorized price is also called an "off book price". See also Ship-from-Stock and Debit.
OEM - See Original Equipment Manufacturer
Original Equipment Manufacturer - A business entity which manufacturers, markets, and sells their own product.
Purchase Agreement Quote - To specify the purchase agreement for prices or annual PA quote type. EDI is used more for this type of quote than the other types. In the electronics industry, we normally try to establish a contract price for a product instead of negotiating the price with every sale. A contract is typically one year in the industry. The buyer will specify the quantity they wish to buy over the life of the agreement and the supplier will discount the list price based on the anticipated volume. Both consider the trend of the marketplace. A purchase agreement is common where a buyer and supplier are trying to establish a long term partnership, much the same as an EDI agreement. EDI is used more for this transaction because of the volume of data that can be involved..
Prime Contractor - A business entity which sub-contracts with a Contract Manufacturer to perform manufacturing services on their behalf
Request for Quote - A business document which is used by potential buyers to solicit information pertaining product availability, pricing, lead time, and other information from potential sellers of goods and services
RFQ - See Request for Quote
RRFQ - Response to Request for Quote. A business document which is used by potential sellers to respond to a Request for Quote with information pertaining to product availability, pricing, lead time and other information.
Sub-Contractor - See Contract Manufacturer
Time and Materials Quote - See
When folks talk about different procurement models, often the differences are in the pre-order processes - what happens before something becomes an order. There are some major categories:
These are factors in the lead time for procuring a product.
Identifying sources and settling on pricing are often done together. When the source is established, there may still be a need to re-address pricing, either order by order, or for long-term contracts. These are methods for sourcing and pricing:
Last updated 02 February 2003