Glossary

CA

The Chartered Accountant qualification.

CAD

Computer aided design – drawings created using software.

CALL-OFF SCHEDULE

A schedule produced to state what amounts of products are to be delivered when.

CAPITAL

The amount of money or assets available to be leveraged by a person or organization, e.g., when starting a company, or buying an asset such as machinery.

CAPITAL COSTS

Large, fixed, one-off expenses incurred in getting a business or process operational.

CAPITAL PURCHASE

The purchase of an item that is a long-term asset such as a building or equipment.

CARBON DISCLOSURE PROJECT (CDP)

An organization working with companies and cities to disclose the environmental impact of major corporations in the interest of fighting climate change.

CARTEL

A group of companies claiming to act independently, but actually acting together to control prices by price-fixing, limiting supply or other restrictive practices.

CASHABLE SAVINGS

Savings that has no impact on the product or service quality, but which result in a sustainable reduction in the budget for purchases of that item.

CASH FLOW STATEMENT

An accounting document that summarizes the incomings and outgoings of cash in an organization.

CASH FLOW

The amount of money moving in and out of a business in a particular period.

CATALOGUE

A list of items for sale that often contains descriptions, pictures, prices and availability.

CATEGORY

A group of goods or services that have shared characteristics.

CATEGORY AWARE

Understanding the market and risks associated with a particular commodity or service.

CERTIFICATE OF ORIGIN (COO)

A document required by customs officials, identifying the country of origin of imported goods, and certified by the supplier’s country’s designated authority, to authenticate the source of the goods.

CHANNEL

The way products and services get to the customer.

CHEMICAL PROCESS

A process in which chemicals or chemical compounds are changed with the help of chemical reactions.

CHIEF EXECUTIVE OFFICER (CEO)

The most senior person in an organization, with overall responsibility for its success.

CHIEF PROCUREMENT OFFICER (CPO)

Chief procurement officer or procurement and supply director – the person with overall responsibility for procurement and supply within an organization.

CLIMATE PROOFING

Identifying risks to an asset, as a consequence of climate variability and change, and ensuring that those risks are reduced to acceptable levels by making changes.

CLOSED SYSTEM

A system or process that, once started, does not allow new entrants. A framework agreement might have multiple buyers and multiple suppliers, but once set up no additional buyers or suppliers can be added to it.

CO2

The chemical formula for carbon dioxide, which is a colorless, odorless gas found in our atmosphere.

CO-OPERATIVE

A people-centered enterprise owned and run by and for their members, which either reinvests any profits or returns it to their members.

COHESIVENESS

Working together effectively.

COLLABORATIVE

Working together for mutual benefit.

COLLUSION

Where two or more potential suppliers (or the purchaser and one or more suppliers) secretly co-operate to undermine the competitiveness of a tender process.

COMBUSTION

The process of burning a fuel so it reacts with oxygen to release energy.

COMMERCIAL

To do with business, intended to make a profit.

COMPETITIVE ADVANTAGE

Putting an organization in a strong position against their competition.

CONFLICT

A disagreement, or difference of opinions or principles.

CONFLICT OF INTEREST (COI)

Where an individual is unable to remain impartial due to a personal, professional or public interest.

CONFORMANCE

The meeting of a required specification or standard.

CONGLOMERATE

Two or more corporations engaged in entirely different businesses that fall under one corporate group.

CONSIGNMENT

A specific quantity of goods being carried.

CONSIGNMENT NOTE

A document describing the contents of a shipment, prepared by a consignor (supplier) and countersigned by the carrier as a proof that the carrier has received the goods for delivery.

CONSIGNMENT STOCK

Inventory owned by the supplier but held at the buyer’s premises.

CONSOLIDATED DELIVERIES

The practice of grouping deliveries with similar products or products which have similar transportation requirements in one journey to reduce the unit cost instead of making many single deliveries of the same item.

CONSUMER

An individual or organization who pays an amount to consume goods or services.

CONSUMERISM

A theory that encourages the increasing purchase of goods and services.

CONTINUING PROFESSIONAL DEVELOPMENT (CPD)

Undertaking training or attending courses to develop knowledge.

CONTINUOUS IMPROVEMENT

An ongoing effort to improve products, processes and services.

CONTRACT

A legally enforceable written or oral agreement between two or more competent parties that defines a job or service to be performed.

CONTRACT CLAUSE

A single, usually numbered, paragraph in a contract setting out the detail of a single condition (or ‘term’) of the contract.

CONTRACT COMPLIANCE

Where items purchased conform to the agreed contract.

CONTRACT MANAGEMENT

Dealing with contracts with suppliers to make sure the terms of the contract are met.

CONTRACT PERIOD/CONTRACT TERM

In this context the contract term is the same as the contract period (i.e., the length of time during which the contract operates). It begins with the START DATE and ends with the EXPIRY DATE. The start date is not necessarily the date on which the contract is signed, but the date on which it comes into effect. The expiry date may be expressed as an actual calendar date (preferred) or as a given number of months (e.g., 36 months) from the start date.

CONTROL CHART

A chart that can be used to analyze how a process changes over time.

CONTROL MEASURE

An action to reduce the potential likelihood that a risk will occur or the impact that it will have.

COPYRIGHT

A legal right created by the law that gives exclusive rights to the generator of the work.

CORE COMPETENCIES

Processes which are critical to an organization achieving success and competitive advantage.

CORPORATE GOVERNANCE

The mechanisms, procedures and processes that are used to control and direct an organization.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

A business approach that contributes to sustainable development by delivering social, environmental and economic benefits for all stakeholders. The CSR policy may cover fundraising for charity, ethical behavior, social and environmental policies, etc.

COST CENTRE

Area of the business or budget to which the purchase needs charging.

COST DRIVER

Anything that means the cost of a good or service will change.

COST OF GOODS SOLD (COGS)

The direct costs for producing goods, i.e., the cost of the materials used, as well as the cost of the labor to produce them and any other allocated overheads. It excludes and distribution or sales costs.

COSTS

The amount of money that has gone out of the business.

COUNTER-OFFER

A response to an offer that is different from the original.

CREDIT LIMIT

The amount of money an organization can borrow from a creditor.

CREDIT NOTE

A document issued to correct mistakes on an invoice – a credit note reduces the amount owed on the invoice document.

CREDIT RATING

A score given to an organization which is based on the amount of risk they propose to the debtor.

CROSS DOCKING

A logistics procedure where incoming products are loaded directly onto an outgoing carrier with minimal handling and storage time.

CROSS-FUNCTIONAL TEAMS

Teams that involve individuals from different departments that work together towards a common goal.

CULTURE

The shared values, practices and beliefs within an organization that determine how its procedures are carried out and how it is run overall.

CUSTOMER

The person who purchases and pays for (but doesn’t necessarily use) a product or service.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SYSTEM

A database to keep track of customers, contacts and a record of transactions.

CUSTOMS

The area of government that controls and administers policies and procedures for the import and export of goods.