What is the subset of
the Supply chain Management?
The subset of the supply chain
management is Sourcing or Procurement.
What is the meaning of Sourcing?
It means managing the demand by
dealing with all aspects related to the inputs to product or service in the
organization with managing the supplier relationship effectively.
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ReplyDeleteSourcing is the proactive management of a supply market to ensure access to adequate resources required for the long term needs of the firm: understand market characteristics, identify relevant potential suppliers, define a strategy for the firm, and set the objectives for any market shaping effort. Sourcing frames the agreement with the suppliers involved in the strategy, without necessarily going into the details of the contract. Sourcing teams include elements internal and external to the firm to reach their objectives, to include the eventual optimization of specifications in coordination with engineering, marketing, and / or research. Sourcing is the strategic management of external resources.
ReplyDeleteSupply chain management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
ReplyDeletefor further details please use the below link
http://www.som.cranfield.ac.uk/som/dinamic-content/media/research/scrip/theorypracticeandfuturechallenges.pdf
Hi Deshani, your definition of SCM is very old & it has developed over the years, please refer below which mentioned new theories in SCM
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The newest SCM theories are linked with the term called customer value in order to provide customer satisfaction through an effective SCM. Today almost all the companies are customer/ Marketing oriented & all the functions operating as per that
Customer value is the primary characteristic of an enterprise's core competitiveness. A customer value oriented supply chain management is able to produce competitive cost and time advantages, as well as solving problems in convergence, coordination and information sharing during the creation and transfer of value, by implementing resource sharing and collaboration between members in the supply chain.
customer value oriented supply chain management should aim to enhance customer perceived benefits and reduce customer perceived sacrifices, in order to maximize customer value through ways of supply chain designing, product selection and business process re-engineering etc.
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You can get basic knowledge of supply chain management by watching below video which explains basic part of SCM through simple examples
ReplyDeletehttps://www.youtube.com/watch?v=_SPNu_il7eI
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ReplyDeletePurchasing is a subset of supply chain management. Purchasing deals primarily with managing all aspects related to the inputs to an organization (i.e., purchased goods, materials, and services), while supply chain management deals with inputs, conversion, and outputs.
ReplyDeleteProcurement Planning is important because:
ReplyDelete1. It helps to decide what to buy, when and from what sources.
2. It allows planners to determine if expectations are realistic; particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows.
3. It is an opportunity for all stakeholders involved in the processes to meet in order to discuss particular procurement requirements. These stakeholders could be the requesting entity, end users, procurement department, technical experts, and even vendors to give relevant inputs on specific requirements.
4. It permits the creation of a procurement strategy for procuring each requirement that will be included in the procurement plan. Such strategy includes a market survey and determining the applicable procurement method given the requirement and the circumstances.
Purchasing is a subset of supply chain management..!
ReplyDeleteIt encompasses all items that are part of finished products, such as raw material, components and parts. Direct procurement, which is the focus in supply chain management, directly affects the production process of manufacturing firms.
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ReplyDeleteProcurement Management Software
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