The Essential Concepts of Purchasing and Supply Management
- Learning Objectives
- Introduction and History of Purchasing
- Why Is Purchasing Important?
- How Can the Appropriate Relationships with Suppliers Create Value?
- Purchasing and Supply Management and Return on Investment (ROI)
- Purchasing and Information Technology (IT)
- The Purchasing Process
- Strategic and Tactical Roles of Purchasing
- Types of Purchases
- Conclusion and Chapter Wrap-Up
- Key Terms
The chapter discusses the roles and objectives of procurement in an organization and in supply chain operations, describes the different types of spending and buying methods, and defines key terminology. Supply management is an important business function that makes a significant contribution to both the top and the bottom line of the organization. The supply chain starts with finding, selecting, and managing effective and efficient suppliers of materials, equipment, and services. The capabilities of these suppliers are an important asset to the organization in terms of innovation and customer value.
After completing this chapter, you should be able to:
- Understand the differences and appreciate the evolution from tactical purchasing to strategic supply management.
- Understand the purpose and goals of the supply management organization and its contribution to profitability and the bottom line.
- Identify the relationship between the purchasing function and other functional areas.
- Identify the activities that are part of supply management.
- Understand the different categories of purchasing spend.