3d year Purchasing
1
Ch 1
Purchasing and Supply Management
Definitions
Every organization on earth needs suppliers. No organization can survive without suppliers. Every
organization also needs customers.
To increase long-term shareholder value, the company must increase revenue, decrease costs or both.
Supply’s contribution should not be perceived as only focused on cost. Supply can and should also be
concerned with revenue enhancement.
What can supply and suppliers do to help the organization increase revenues or decrease costs?
should be a standard question for any supply manager.
In large supply organizations, supply professionals often are divided into two categories: the
tacticians who need strong computer and information systems skills and the strategic thinkers who
possess strong analytical and planning skills.
Purchasing, supply management, and procurement are used interchangeably to refer to the
integration of related functions to provide effective and efficient materials and services to the
organization.
Thus, purchasing or supply management is not only concerned with the standard steps in the
procurementريبدت process which include:
(1) The recognitionىلع فرعت of need,
(2) The translation of that need into a
commercially equivalent description,
(3) The search for potential suppliers,
(4) The selection of a suitable source,
(5) The agreement on order or contract details,
(6) The delivery of products or services, and
(7) The payment of suppliers.
Further responsibilities of purchasing may include receiving, inspectionصحف, storage, materials
handling, in- and outbound traffic, and disposal.
Purchasing also may have responsibility for other components of the supply chain, such as
organization’s customers and their customers and their suppliers’ suppliers.
This extensionعسوت represents the term supply chain management, where the focus is on minimizing
the costs and times across the supply chain to the benefit of the final customer in the chain.
The idea that competition may change from the firm level to the supply chain level has been
advanced as the next stage of competitive evolution.
Lean purchasing or lean supply management refers primarily ةيادبلا ف to manufacturingعينصتلا
context and the implementation of the just-in-time (JIT) tools and techniques to ensure every process in
the supply process adds value, that inventories are kept in a minimum level, and that distances and
delays between process steps are kept as short as possible. Instant communication of job status is
essential and shared.
