Supply chain management: maverick buying

Published on March 31, 2024   35 min

Other Talks in the Series: Logistics Management

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Supply Chain Management: Maverick Buying, presented by Dr. Darren Prokop, Professor Emeritus of Logistics, University of Alaska, Anchorage.
What is supply chain management? It is the linkage of organizations in order to meet some strategic goal. Linkages could be achieved through contractual relationships or through mergers & acquisitions. Linkages could be more informal and involve a joint venture or strategic alliance covering a more limited business activity. In any case, the intent of supply chain management is to foster trusting relationships whereby the partners are more valuable together than apart.
Companies, which sell their outputs on a regular basis, typically buy their inputs on a regular basis as well. Inputs bought from vendors may include raw materials, subassemblies, finished goods, and support services. Since the company's production pace depends on a reliable stream of inputs, relationships with key vendors should be codified within a legal contract. The intent is to reduce purchasing costs and strengthen buyer-vendor relationships. Buying only from company-authorized vendors can serve to centralize purchasing decisions. However, lower echelon buyers within the company may not abide by the company's purchasing policy and purchasing process. This breakdown in the buyer-vendor relationship is known as Maverick Buying. Maverick is an eponym from Samuel A. Maverick, 1803-1870. A Texas politician and rancher who, unlike other ranchers at the time, chose not to brand any of his cattle. Hence, the word has come to mean independent-minded or non-conformist. Regarding Maverick buying, instead of the word 'maverick', some use the term off-contract to mean the same thing. Instead of the word buying, some use synonyms, such as spending, purchasing, or procurement. Low-priced, low-priority items such as