purchasing in supply chain management activites

SCM stands for Supply Chain Management. It's the process of managing the flow of goods, data, and finances from the beginning to the end of a product's journey.
What does SCM involve?
Sourcing raw materials
Designing the product
Manufacturing the product
Warehousing the product
Shipping the product
Distributing the product
Delivering the product to the customer
What are the goals of SCM? To improve efficiency, To improve quality, To improve productivity, and To improve customer satisfaction.
What are the key responsibilities of SCM?
To ensure that customers can get the products they want
To ensure that manufacturers can get the materials they need
How is SCM optimized? By using demand planning, By using inventory management, By using logistics, and By using procurement and supplier management.
How is SCM moving to the cloud?
To take advantage of the cloud's flexibility and adaptability
To accommodate growth without incurring high costs
To protect critical data and applications during emergencies
What Is Supply Chain Management? - IBM
Supply chain management (SCM) is the coordination of a business' entire production flow, from sourcing raw materials to delivering...

IBM
What is SCM (Supply Chain Management)? - Oracle
At the most fundamental level, supply chain management (SCM) is management of the flow of goods, data, and finances related to a p...

Oracle
What is supply chain management (SCM)? - TechTarget
Supply chain management, or SCM, is a broad field that encompasses all the processes, systems and strategies for optimizing a pro

1. PURCHASING IN SUPPLY CHAIN MANAGEMENT MS.B.JAYALAKSHMI

2. INTRODUCTION Purchasing is a critical function in supply chain management (SCM) that involves acquiring goods and services needed by an organization to fulfils operational requirements. Effective purchasing is essential for ensuring the smooth flow of materials through the supply chain and ultimately contributing to the success of the business. Here are key aspects of purchasing in supply chain management.

3. Supplier Selection: Identifying and selecting reliable suppliers is a crucial step in the purchasing process. This involves evaluating potential suppliers based on criteria such as quality, cost, reliability, and responsiveness. Negotiation: Negotiating favorable terms with suppliers is a skill that purchasing professionals need to possess. This includes negotiating prices, payment terms, delivery schedules, and other contractual terms. Cost Management: Managing costs is a primary responsibility of the purchasing function. This involves not only negotiating favorable prices but also considering total cost of ownership, which includes factors such as transportation, inventory carrying costs, and potential risks. Risk Management: Identifying and mitigating risks in the supply chain is essential. This includes assessing the financial stability of suppliers, geopolitical factors, and potential disruptions in the supply chain Supplier Relationship Management (SRM): Developing and maintaining strong relationships with suppliers is critical for long-term success. Effective communication and collaboration can lead to improved performance, innovation, and mutual benefits.

4. IMPORTANCE The purchase function in supply chain management is of paramount importance as it plays a critical role in the overall success and efficiency of an organization's operations. Purchasing involves acquiring goods and services from external sources, and its significance can be understood through various aspects: Cost Management Supplier Relationship Management. Risk Management Quality Assurance Strategic Sourcing Inventory Management Compliance and Ethics Cost of Goods Sold (COGS)

5. OBJECTIVES: Cost Reduction and Cost Management Supplier Relationship Management Quality Assurance Risk Management Strategic Sourcing Supplier Diversity Efficient Procurement Processes Compliance with Regulations and Ethics

6. PURCHASING PROCESS IN SUPPLY CHAIN MANAGEMENT Identifying Needs Supplier Identification Supplier Evaluation and Selection Purchase Requisition Purchase Order (PO) Creation Order Confirmation Goods/Service Receipt and Inspection Invoice Approval and Payment Record Keeping Supplier Performance Evaluation

7. PURCHASING FUNCTIONS Sourcing Strategy Development Supplier Identification and Evaluation Negotiation Contract Management Purchase Planning Purchase Requisition Supplier Relationship Management Quality Assurance and Inspection Risk Management Inventory Management

8. INTEGRATED LOGISTICS INTERFACE Information Systems Integration Process Integration Collaboration and Communication End-to-End Visibility Supplier and Customer Integration Logistics Service Provider Integration

9. TYPES OF PURCHASES IN SCM: Raw Materials Purchases Components and Parts Purchases Finished Goods Purchases MRO (Maintenance, Repair, and Operations) Purchases Capital Goods Purchases Services Purchases Direct vs. Indirect Purchases Strategic Purchases Routine Purchases Spot PurchasesSpot Purchases

10. PURCHASING PARTNERSHIPS Long-Term Relationships Shared Objectives Information Sharing Joint Planning and Forecasting Risk Sharing Continuous Improvement Joint Product Development and Innovation Performance Metrics and Measurement Contract Flexibility Collaborative Problem-Solving

11. Thank you Ms. B .Jayalakshmi