This paper analyzes the purchasing process and supply chain management. Purchasing is the process of obtaining services, materials, or components from another firm. It is the foundation for supply management. Purchasing entails obtaining the right material, service, or component at the right quantity, quality, and at the right place and time. Supply chain management is the process of managing the flow of goods and services. It also entails the transformation of raw materials to the finished products. Therefore, it links the production, shipment, and distribution processes of a product. It helps to cut the excess costs and deliver goods and services within a short period.
purchasing process and supply chain management
ANALYSIS OF THE PURCHASING PROCESS OF A BUSINESS
A formal purchasing process helps to reduce cases of fraud, theft, and other financial problems. Optimizing the purchasing process ensures optimal supply chain management and strategic sourcing in cost savings and value. Purchasing is a cycle that follows an established pattern of events. It begins with the analysis of the goods or services needed to ensure a smooth flow of goods and services. The department requesting the goods or services submits the purchase requisition that contains the full details of the items or services to acquire. The purchasing department reviews and approves the purchase order. The procurement department creates requests for quotations and sends them out to vendors. The negotiation of contracts with vendors begins. A contract is signed and delivery of goods or services begins.
analysis of the business purchasing process
THE COMPONENTS OF SUPPLY CHAIN MANAGEMENT
An efficient supply chain management ensures a cost-effective process and a seamless flow of goods and services. It should begin with strategic planning that includes checking for the aspects such as the demand for a product or service, the viability, and costing. It should also maintain a continuous flow of information. Supply chain management ensures that the procurement of quality raw materials. The purchasing process of obtaining raw materials requires efficiency to ensure that the process is cost-effective. The inventory is also kept and maintained at high standards. Production is also an important component of supply chain management. It requires proper planning to achieve success.
components of supply chain management
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