Glossary

MACRO ENVIRONMENT

External factors beyond an organization’s control that will influence its success, such as government policy, technology, and social and cultural factors.

MAKE-TO-STOCK

Where an item is produced specifically to go into stock, for later sale.

MAKE OR BUY

A decision about what products or services an organization will manufacture or provide themselves in-house, and which will be purchased from outside sources.

MANUAL HANDLING

The transport or support of any load by one or more employees, including lifting, putting down, pushing, pulling, carrying or moving a load.

MANUFACTURING RESOURCE PLANNING (MRPII)

A computer-based inventory management system that combines all available strategic and planning data to support inventory forecasting.

MARKET

Where buyers meet sellers to trade products and services. This can relate to a specific location or to the general economic environment.

MARKET ANALYSIS

This helps procurement professionals to understand how the supply market works, the direction that the market is going in, the level of competition and the key suppliers in the market.

MARKET FACTORS

Elements that influence the demand for, or the price of, a good or service.

MARKET KNOWLEDGE

A detailed understanding of the influences, activities and trends in the market for a particular product or service (also known as category knowledge).

MARKET PRICE

The amount that customers are charged, depending on supply and demand for the products or services.

MARKET SATURATION

This usually means that there is more than enough supplier capacity to meet customer demand.

MARKET SEGMENT

A group of consumers with common characteristics that are grouped together for the purpose of marketing a product or service.

MASTER PRODUCTION SCHEDULE (MPS)

A plan that a company has produced for the purposes of scheduling machinery, staffing, resourcing, etc., that is used to ensure smooth, continuous productions.

MATERIAL ASSETS

Tangible items that are required to carry out an organization’s activities, such as tools, machinery, staff and buildings.

MATERIAL REQUIREMENTS PLANNING (MRP)

An electronic system used to plan production which includes scheduling orders, monitoring inventory and managing the production process.

MATERIALS MANAGEMENT

The part of the procurement process that makes sure organizations have the materials they need to operate.

MAVERICK SPEND/OFF-CONTRACT SPEND

Where local staff ignore existing contractual arrangements and purchase from other suppliers. This may be for fraudulent reasons, but most often it is simply because they believe they can get a better deal and do not understand the overall impact on the business.

MEAN

Another name for the average. The mean is calculated by adding all of the values together, then dividing by the number of values.

METHOD STATEMENT

A plan or procedure that details how a process or task will be carried out.

MICRO-, SMALL AND MEDIUM ENTERPRISES (MSME)

The expansion of SME to include microbusinesses, which are usually defined as having fewer than ten employees.

MICROENVIRONMENT

Factors that directly influence an organization’s success, such as competitors, suppliers, employees and customers.

MIDDLE MAJORITY

A group of consumers who buy or use a new product or technology after seeing it used successfully by innovators and early adopters.

MILESTONES

Important stages or events within a process.

MINI-COMPETITION

A limited tender exercise, usually only on price, under the rules set out in a framework agreement; only suppliers appointed to the framework are able to take part.

MINIMUM ORDER QUANTITY (MOQ)

The smallest amount of a product a buyer can order from the supplier.

MINORITY BUSINESS ENTERPRISES (MBE)

Minority group members are United States citizens who are Asian-Indian, Asian-Pacific, Black, Hispanic and Native American. Ownership by minority individuals means the business is at least 51% owned by such individuals or, in the case of a publicly owned business, at least 51% of the stock is owned by one or more such individuals (i.e., the management and daily operations are controlled by those minority group members).

MINUTES

A written record of a meeting, stating when it took place, who was present, what was discussed and what actions have been agreed.

MISSION STATEMENT

Short statement setting out an organization’s purpose.

MITIGATION/MITIGATING ACTION

An action that reduces the severity of an outcome.

MIXED LOADS

This is where a vehicle contains more than one type of product.

MOBILISATION

When a contract shifts from one supplier to another.

MODEL PROCUREMENT CODE (MPC)

A publication approved by the American Bar Association which sets forth procurement statutory principles and policy guidelines for managing and controlling the procurement of supplies, services and construction for public purposes; administrative and judicial remedies for the resolution of controversies relating to public contracts; and a set of ethical standards governing public and private participants in the procurement process

MODERN-DAY SLAVERY

The act of forcing people to work in poor conditions for little or no money.

MONOPOLY

A situation in a market where one organization controls the supply of goods or services, and new entrants find it difficult to enter the market.

MONOPSONY

A market with only one buyer.

MOONLIGHTING

Paid work from a second job that is done without a main employer’s consent.

MOVEMENTS

A shift in demand or supply, or price.

MULTI-NATIONALS

Organizations that have facilities and assets in more than one country.

MULTILATERAL TRADE AGREEMENTS

An exchange agreement between more than two nations or trading groups that gives each group favored trade status connected to certain goods obtained from the signatories.

MULTILINGUAL

In or using several different languages.

MULTIPLE AWARD

Contracts awarded to more than one supplier for comparable supplies and services. Awards are made for the same generic types of items at various prices.