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Chapter One Chapter Outline Purchasing and Supply Management Supply Management Terminology Supply and Logistics The Size of the Organization’s Spend and Financial Signifi cance Supply Contribution The Operational versus Strategic Contribution of Supply The Direct and Indirect Contribution of Supply The Nature of the Organization Supply Qualifications and Associations Challenges Ahead Supply Chain Management Measurement Risk Management Sustainability Growth and Infl uence Effective Contribution to Organizational Success The Organization of This Text Conclusion Questions for Review and Discussion References Cases 1–1 Qmont Mining 1–2 Erica Carson 1–3 Southeastern University Purchasing and Supply Management
2 Purchasing and Supply Management
Key Questions for the Supply Decision Maker
Should we
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Rethink how supply can contribute more effectively to organizational goals and strategies?
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Try to find out what the organization’s total spend with suppliers really is?
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Indentify opportunities for meaningful involvement in major corporate activities?
How can we
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Align our supply strategy with the organization’s strategy?
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Get others to recognize the profit-leverage effect of purchasing/supply management?
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Show how supply can affect our firm’s competitive position?
Every organization needs suppliers. No organization can exist without suppliers. Therefore, the organization’s approach to suppliers, its acquisition processes and policies, and its relationships with suppliers will impact not only the performance of the suppliers, but also the organization’s own performance. No organization can be successful without the support of its supplier base, operationally and strategically, short- and long-term.
Supply management is focused on the acquisition process recognizing the supply chain and organizational contexts. Special emphasis is on decision making