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Should supply chain department under procurement department ??
In my opinion, procurement itself not a department as its a function branch of Supply chain department. Although its a major parts of supply chain. Like Logistic, transportation and delivery, warehouse management, procurement is also a core part of supplychain
Thank you for inviting to this discussion!
Supply chain is basically a process which involves everything (from raw material to finished goods) and everyone (like manufacturer, distributor, supplier, logistics, warehouse & customer, etc ). Whereas, procurement is a business functions in company which is responsible for getting goods/services from supplier to fulfill the business needs.
In simple words, supply chain is an umbrella under which procurement lies as one of the member function ( also incl functions like sourcing, logistics, warehousing, etc)
Often large organizations will monitor the supply chain process more closely as compared to small & mid size companies. But knowing the overall supply chain is more important even for small & mid size organizations as it creates an opportunity to save cost by identifying the processes where more spending is involved.
Procurement under Supply Chain Management
Dear Gurjit Singh
Kindly consider in simple way that Procurement is part of an overall of Supply chain process/management. Since Procurement is all necessary processes to get the goods that your company need and it stop at receiving these goods. Supply chain will include the procurement phase plus the further processes needed to deliver Goods/Services to end customers.
Please refer to link below for more details.
http://blog.procurify.com/2014/10/28/difference-procurement-supply-chain-management/
Thank you.
All the best.
Samir.
I believe Procurement is only one of the functions of Supply Chain. The Supply Chain links all functions together (Integrates) of an enterprise. The success of an enterprise is dependet on all of its functions and effective Supply Chain is the engine that provides this mechanism. Supply Chain is the mother and procurement is one of the child in the family to descibe it in simplest form. And can a child outgrow its mother I doubt it seriously.
Hello Team,
The Difference between Procurement and Supply Chain ManagementProcurement is the process of getting the goods you need, while supply chain is the infrastructure (extensive, in many cases) needed to get you those goods.
Okay, let’s face it. We use a lot of the terms associated with the procurement world interchangeably. Procurement! Purchasing! Supply chain management! They’re all the same!
No…not quite.
These terms are related, of course, but they aren’t interchangeable. There is a distinct difference between procurement and supply chain management.
Procurement “is the process of getting the goods and/or services your company needs to fulfill its business model. Some of the tasks involved in procurement include developing standards of quality, financing purchases, negotiating price, buying goods, inventory control and disposal of waste products like packaging. In the overall supply chain process, procurement stops once your company has possession of the goods. To make a profit, the cost of procuring your goods must be less than the amounts you can sell the goods for, minus whatever costs are associated with processing and selling them.”
A supply chain “consists of everybody involved in getting your product in the hands of a customer. It includes raw material gatherers, manufacturers, transportation companies, wholesale warehouses, in-house staff, stock rooms and the teenager at the register. It also includes the tasks and functions that contribute to moving that product, such as quality control, marketing, procurement and sourcing. Using the above analogy, the supply chain casino online can be considered the entire chair, while procurement and sourcing are parts of the chair.”
Procurement is the process of getting the goods you need, while supply chain is the infrastructure (extensive, in many cases) needed to get you those goods.
So, if a supply chain is the network of manufacturers, suppliers and logistics providers needed to get a specific product to your business and, subsequently, your customers…then what is supply chain management?
At its core, supply chain management is the act of overseeing and managing a supply chain to ensure it is operating as efficiently as possible. That means, amongst other things, ensuring all suppliers and manufacturers are maintaining the desired quality of production and that both camps are engaged in ethical business practices.
The latter point is a significant issue faced by many organizations today. If a piece (or pieces) of a supply chain aren’t doing business in an ethical manner (think child labour or environmental damage) then the organization receiving goods from that supply chain can suffer negative repercussions as a result.
Supply chain management should ultimately be considered one of many responsibilities faced by a procurement function. By highlighting these differences, we will get a better, more fulsome understanding of the intricate procurement world. And hopefully, we”ll stop using terms interchangeably when we shouldn’t.
Regards,
Saiyid
agree with all expert answers above
Supply Chain has a bigger scope than just procurement.
Usually procurement is a part of Supply Chain, unless the procurement operations are too big to be a independent department.
PURCHASING
Purchasing is the act of buying the goods and services that a company needs to operate and/or manufacture products.
Many people are ignorant of what purchasing is all about. “Purchasing” is the term used in industries, commerce, public corporations to denote the act of and the financial responsibility for procuring material, supplies and services. It simply describes the process of buying. However in a broader sense, the term involves determining the needs, selecting the supplier, arriving at a proper price, terms and conditions, issuing the contract or order, and following up to ensure proper delivery. It focus is to purchase or obtain materials in the right quantity, in the right quality, at the right price, at the right time, and from the right supplier and delivering to the right place.
SUPPLY CHAIN MANAGEMENT
Supply chain management (SCM) is a process used by company’s to ensure that their supply chain is efficient and cost-effective. A supply chain is the collection of steps that a company takes to transform raw components into the final product. Typically, supply chain management is comprised of five stages: plan, develop, make, deliver, and return.
The first stage in supply chain management is known as Plan. A plan or strategy must be developed to address how a given good or service will meet the needs of the customers. A significant portion of the strategy should focus on planning a profitable supply chain.
Develop is the next stage in supply chain management. It involves building a strong relationship with suppliers of the raw materials needed in making the product the company delivers. This phase involves not only identifying reliable suppliers but also planning methods for shipping, delivery, and payment.
At the third stage, Make, the product is manufactured, tested, packaged, and scheduled for delivery. Then, at the logistics phase, customer orders are received and delivery of the goods is planned. This fourth stage of supply chain management stage is aptly named Deliver. The final stage of supply chain management is called Return. As the name suggests, during this stage, customers may return defective products. The company will also address customer questions in this stage.
Procurement and supply management involves buying the goods and services that enable an organisation to operate
