Purchasing and supply management: the important difference that you must know

| 0 Comments

MosesManuel_100.jpgBy Moses Manuel, Lecturer in Business, Legal and Development Studies, and Founder of Zerite Network

Purchasing and supply management is not an entirely new concept to most people. Take a look at the first part, purchasing: we all undertake purchasing, be it data for your mobile phone, food, clothes, etc. Purchasing and supply management is one of those things you know, hence, you do not give it much thought. In business, however, it is another thing. There is a huge difference between doing something on a daily basis and doing it professionally.

Let us look at purchasing and supply management from a professional perspective.

What is purchasing?
From an organisational point of view, purchasing involves the acquisition of supplies or inputs, that is, raw materials, components, goods and services, needed for an organisation's activities, such as conversion, consumption or resale.

Some organisations have departments that handle this kind of thing, this is where you find the procurement specialists, while in other organisations it is usually individuals or teams from other departments, like finance or production, that end up handling purchasing.

What you need to understand about professional purchasing is that, irrespective of who is doing it, the basic purchasing objective is to buy materials of the right quality, in the right quantity, delivered to the right place at the right time at the right price. These 5Rs are fundamental.

What about supply management?
Supply is the process or act of providing something or making something available, often in response to a customer's requirement.

Supply management means making sure that everything goes well in the process involving the flow or transfer of goods, services or information from a supplier to a customer. Supply often happens as a 'chain' of activities, where the outputs of one activity end up being inputs of another and so on.

Here is a practical example: raw materials are supplied to a manufacturer of components, the finished components are supplied to a maker of sub-assemblies or modules, the finished sub-assemblies or modules are supplied to a manufacturer or assembler of equipment, the finished equipment is supplied to a wholesaler who supplies retailers, who supply the end-user or consumers of the equipment.

Why is the distinction important?
Purchasing and supply management is important since it helps to secure and convert inputs from suppliers into outputs that will satisfy customers.

Remember that each supply chain has two sides: an upstream and a downstream. At the upstream end, that is, the end of a supply chain, we look at suppliers as an important factor because they influence the quality of inputs that go into the making of products and deliveries of services. On the downstream end, customer needs are the driving force behind all organisational activities.

This means that purchasing and supply management becomes important if you are to add value to whatever goods or services you offer, if you are to gain any competitive advantage. Keep in mind that businesspeople pay for solutions and these will depend on the perceived value of your goods or services.

Zerite Network

Leave a comment


 

 

Career opportunites

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Job purpose We are looking for a Procurement

Fresh Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Jnr - Mid Level), Supply Chain Planning, Based

Groceries Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Mid Level) Supply Chain Planning, Based at Kenilworth,

Category Implementation Manager

  • >500 000 Gauteng Permanent Projects / Category Management Supply Chain
As an Executive Search and Career Consultant specializing

Head of Procurement

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Regional Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Director

  • >500 000 KwaZulu Natal Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Specialist

  • >500 000 Buyer Gauteng Permanent Procurement Officer / Specialist
As an Executive Search and Career Consultant specializing

Senior Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing Supply Chain
As an Executive Search and Career Consultant specializing

Indirect Sourcing Programme Manager

  • >500 000 Contract Projects / Category Management Strategic Sourcing Western Cape
As an Executive Search and Career Consultant specializing

Deputy Chief Commercial Officer

  • >500 000 Contract Gauteng Procurement Management Supplier / Business Development
As an Executive Search and Career Consultant specializing

GROUP PROCUREMENT MANAGER

  • Gauteng Permanent Procurement Management Supplier / Business Development
Operating out of Johannesburg, this is a key

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is