Procurement glossary
Procurement glossary: purchasing and sourcing terms from A to Z
More than 1,000 terms from strategic and operational procurement, supply chain, quality and logistics – clearly explained with KPIs, practical examples and FAQ.
26 of 1007 terms explained – more added continuously.
Key terms
- CBAMCBAM (Carbon Border Adjustment Mechanism) is the European Union's carbon border adjustment system, under which imported, emissions-intensive goods have been sub
- DUNS numberThe DUNS number is a globally unique nine-digit identification number for companies, issued and managed by Dun & Bradstreet. In technical procurement, it serves
- Purchase OrderThe purchase order is a company's binding, written offer to a supplier to take delivery of goods or services on defined terms. It forms the legal and organisati
A
- A-SupplierA-supplier · key supplier · strategic supplierA-suppliers are a company's most important suppliers – the sources of supply whose failure or performance decline would immediately jeopardise the company's own
- ABC analysisABC classification · ABC analysis · Pareto analysisABC analysis is a classic method in procurement and materials management for classifying items, suppliers or order lines according to their importance to busine
- ABC/XYZ Classification CycleABC/XYZ analysis cycle · ABC-XYZ matrix · combined ABC/XYZ classificationThe ABC/XYZ classification cycle describes the regular repetition of the combined value analysis (ABC) and demand variability analysis (XYZ) across the company'
- Acceptance criteriaacceptance conditions · acceptance test criteria · acceptance specificationAcceptance criteria are the contractually or formally defined requirements that a supplied item must fulfil in order for the customer to accept the delivery. Th
- Approved Vendor List (AVL)Approved Vendors List · Qualified Supplier ListThe Approved Vendor List (AVL) is the central register of all suppliers approved for procurement within a company. It documents which providers are qualified fo
B
C
- Call-off ordercall-off order · release order · blanket releaseA call-off order is an order in which the buyer does not specify delivery quantities and dates immediately, but draws down the requirement over a framework peri
- Carnet (ATA)ATA Carnet · Merchandise Passport · Admission Temporaire CarnetA Carnet (ATA) is an internationally recognised customs document that enables the temporary export of goods without a fresh customs declaration and, in most cas
- CBAMCarbon Border Adjustment Mechanism · EU Carbon Border Tax · CBAM RegulationCBAM (Carbon Border Adjustment Mechanism) is the European Union's carbon border adjustment system, under which imported, emissions-intensive goods have been sub
- Commercial InvoiceCommercial Invoice · Export Invoice · Customs InvoiceThe commercial invoice, in German Handelsrechnung, is the central settlement and evidence document for cross-border goods deliveries. It documents the obligatio
- Cost Avoidancecost avoidance savings · avoided costs · cost preventionCost avoidance refers to the prevention of costs that would have arisen without countermeasures taken by procurement, without these being directly reflected in
- Cost BreakdownCost Breakdown · Cost Structure Breakdown · Cost DecompositionThe cost breakdown, also known in German as Kostenaufschlüsselung or Kostenstrukturaufstellung, is the detailed breakdown of the price of a service or component
- Cross DockingCrossdocking · Direct transfer · Flow-through distributionCross docking is a logistics method in which incoming goods are received at the transhipment point, sorted immediately and transferred directly to outbound tran
D
- DemurrageDetention · Storage · Container demurrageDemurrage refers to charges incurred when containers or means of transport exceed agreed standing times and therefore remain tied up longer than permitted with
- Design-to-CostDesign to Cost · DTC · Target CostingDesign-to-Cost is an approach in which target costs are anchored early in product development and design decisions are consistently aligned with these targets.
- Dual sourcingSecond-source strategy · Second Sourcing · Two-Source StrategyDual sourcing refers to the procurement strategy of deliberately sourcing a good, a component or a service from two suppliers rather than relying on a single pr
- DUNS numberD-U-N-S number · DUNS Number · D&B DUNSThe DUNS number is a globally unique nine-digit identification number for companies, issued and managed by Dun & Bradstreet. In technical procurement, it serves
- Dynamic DiscountingDD · dynamic early payment discount · flexible discountingDynamic discounting denotes a method of supplier financing management in which payment terms and early payment discounts are not fixed rigidly but negotiated an
P
- Procurement marketingprocurement marketing · reverse marketing · supply marketingProcurement marketing refers to the active, market-oriented shaping of the relationships between a company and its suppliers. It shifts the perspective from mer
- Purchase commitmenttake-or-pay clause · purchase commitment · minimum purchase agreementA purchase commitment (also known as a take-or-pay clause or offtake agreement) is a contractual undertaking by the buyer to accept a defined quantity or a mini
- Purchase OrderPOThe purchase order is a company's binding, written offer to a supplier to take delivery of goods or services on defined terms. It forms the legal and organisati
- Purchase Requisition (BANF)purchase requisition · material requisition · requisitionThe purchase requisition, or BANF for short, is the formal document or system entry with which a functional department reports its requirement for materials, se