supply chain management

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Supply Chain Management

The act or process of ensuring that one's business has the proper supplies in order to continue operations. Supply management involves ensuring that supplies are procured as cheaply as possible. For example, a construction company must procure cement, wood, and nails efficiently and inexpensively; equally, a consulting firm must make sure that research materials are easily available. Large companies often devote whole divisions to supply chain management, giving them budgets of millions of dollars to help the company save money.

There are two basic types of supply chain management: just in time and just in case. A just in time supply chain management strategy involves keeping only enough inventory to meet immediate business needs. This requires constant monitoring but can save a significant amount money. A just in case strategy, on the other hand, keeps a larger inventory to meet unexpected increases in demand. This saves less money (depending on the nature of the business and matters like carrying costs) but can be easier to manage.

supply chain management

a term used to describe the management of inventory (STOCK), not only within a firm but also along the network of suppliers and customers which constitute the SUPPLY CHAIN or VALUE-ADDED CHAIN. Supply chain management employs a variety of methods such as STOCK CONTROL, MATERIALS REQUIREMENT PLANNING and DISTRIBUTED REQUIREMENT PLANNING to both minimize stock-holding costs while maintaining effective distributed levels of servicing customer orders. See SUPPLIER DEVELOPMENT.
References in periodicals archive ?
The researchers also found evidence in support of improvements in the quality of the work at a given price, suggesting that the system prior to e-procurement was not necessarily selecting the most efficient firms, and that e-procurement may have improved efficiency even if it did not necessarily lower prices paid.
Does e-procurement represent a new and effective way to reduce purchasing costs?
based Coupa also says it offers the first on demand e-procurement solution for SMBs that automates the entire purchasing process--from requisition, approval and purchase-order creation to requests for quotations (RFQs), quotations, receiving, inventory and invoicing.
In 2003, the University of Chicago chose AcquireX as the e-procurement provider for the university's Campus Computer Stores.
E-procurement has opened up the competitive process.
The benefits of e-procurement to purchasing organizations include lower transaction costs, faster ordering, greater selection of suppliers, and reduced maverick buying.
The benefits of e-procurement are clear," said Claire Ighodaro, financial controller at BTopen-world and vice-president of CIMA.
With e-procurement, the time needed to issue a manual purchase order, place the order and follow-up with a vendor can be reduced to a few simple points and clicks.
With e-procurement, such order tracking is simplified and needs to be done only if there is a problem.
E-procurement is one example of bow the Internet has revolutionized the way businesses interact.
e-Net commissioned the report - based on original research among purchasing managers - for the launch of its new online purchasing software, esparto e-procurement, an application that brings together orders from different parts of an organisation with individual budgets into a single requisition.
A new survey commissioned by the UK hosted e-procurement business systems provider TomorrowFirst has revealed that it is the purchasing department and not the IT director that is leading the implementation of e-procurement within British companies.