Supply management
From Wikipedia, the free encyclopedia
Supply management is a term describing the methods and processes of modern corporate or institutional buying. This may be for the purchasing of supplies for internal use, purchasing raw materials for the consumption during the manufacturing process, or for the purchasing of goods for inventory to be resold as products in the distribution and retail process.
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[edit] General
The supply management function of an organization is responsible for various aspects of acquiring goods and services for the organization. In many organizations, acquisition or buying of services is called contracting, while that of goods is called purchasing.
Tasks associated with supply management include:
- Analyzing spending
- Strategic sourcing
- Obtaining and evaluating quotes from suppliers
- Negotiating
- Managing supplier performance
- Implementing technologies, processes, policies, and procedures to support the purchasing process (Supplier Relationship Management or SRM)
Supply management is generally regarded as a systematic business process that includes more functions than traditional buying, such as coordinating inbound and internal pre-production logistics and managing inventory.
Supply management deals primarily with the oversight and management of materials and services inputs, management of the suppliers who provide those inputs, and support of the process of acquiring those inputs. The performance of supply management departments and supply management professionals is commonly measured in terms of amount of money saved for the organization. However, managing risk is one of the other critical aspects of supply management; especially the risk of non-availability at the required time of quality goods and services critical for an organization's survival and growth.
The importance of professionalism of a purchasing and supply management staff has increased over the years. In 2004, the first supply management certification program - the Senior Professional in Supply Management (SPSM) Certification Program - was introduced. The SPSM Certification is globally recognized with employers from over 50 countries throughout the world having enrolled their supply management employees in the SPSM Certification Program as of late 2006.
[edit] Supplier relationship management
Supplier relationship management a.k.a. SRM, is the process in which a business systemetically keeps track of the vendors and suppliers which they buy from, usually by utilizing an information system that automates sourcing, purchasing and the management of daily supplier relations. It provides modules for vendor identification and selection as well as direct procurement. In laymans terms, it is an Rolodex with information on the Who, What, When, Where, and How of suppliers.
SRM software is described as an database system with, "the ability to develop or maintain a sourcing relationship with your suppliers, which is enabled by one or more software modules that collaborate with each other"
[edit] Supply chain management
Supply management is different than supply chain management, though it can be considered a component of supply chain management. Supply chain management generally refers to:
- The oversight and management of materials and services inputs
- The production process in which those materials and services are used, and
- The provision of outputs that are generated through the use of the acquired materials and services, which is analogous to the fulfillment of customer requirements.
