Essay Sample on Differences Between Purchasing and Supply Management

Paper Type:  Essay
Pages:  4
Wordcount:  1076 Words
Date:  2022-11-13
What are the differences between purchasing and supply management; also differences between supply chains and value chains.

Purchasing management includes both the functional unit and activities of an organization, which provides for the performance of fundamental activities of a company that seeks a maximum profit for the organization. Purchasing management involves activities such as the identification and selection of a supplier, purchase system development, and conducting market research (Monczka et al. 11). The purchase management can be summarized with five rights; quality, quantity, price, time and source. On the other hand, supply management is an inclusive concept of purchasing, but it further involves strategic planning for and fulfillment of enterprise current and future needs through efficient management of suppliers, utilization of internal processes along other cross function teams to fulfill the organizational objectives. In supply management, the business pursues activities that have a significant impact on the long-term goals of an organization.

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Identify the activities that are part of supply chain management and list the 4 supply chain enablers.

Activities of supply management include those that influence purchasing and sourcing approaches of an organization which boosts the business and supply chain goals (Monczka et al. 19). They consist of:

  • Order fulfillment
  • Demand management strategy
  • Manufacturing flow management
  • Returns control
  • Product development and commercialization
  • Consumer service and relationship management
  • Supplier management
  • The supply chain enablers include
  • Information system
  • Strategic alliance/ Measurement
  • Human resource management
  • Organizational infrastructure

What the differences between supply chain and value chain?

A supply chain is a conglomeration of three or more organizations linked directly with stream flows of product, finance, services, and information that connect them with the source to the client. A supply chain involves activities like industries obtaining raw materials together, process, package, and deliver them to the customer. But for a value chain, it is a broader aspect of a supply chain that includes a set of primary and support activities configured with an organization to provide a competitive advantage (Monczka et al. 11).

What knowledge and skills do you feel are required for a purchasing professional?

Procurement professionals should be detail oriented, in that they can scrutinize large document for vital information in shortest time possible.

They should be good time managers whereby attention is given to the immediate priorities that result to fulfillment of objectives.

They should be individual of good judgment and decision making where decisions are made from process rather than from emotional feeling.

They should have the ability to build and maintain long term health relationship with suppliers while reviewing the profitability of their bond on returns for the organization.

Purchase managers should be negotiators with incomparable persuasion capacity and always drive towards a win-win situation with the other party.

Best purchase professions should embrace creativity and problem solving for the best outcome since their task is often affected with rapid changes in demand and supply, thus, often be proactive in meeting organizational needs.

Briefly discuss 4 of the seven periods in the evolution of purchasing and supply management.

The currents stage of purchasing and supply management chain processes has undergone evolutions for over the last 160 years which have seen improvement in the system. An overview of the stages can be summarized below.

Period 1: Early years 1850-1900

Before the era, businesses did not require a specialized selling agent since the customer orders determined the purchase orders as seen in the early textile industry. With the development of railway transport at the time, the distribution of goods to the interior, remote area was enhanced; thus companies recorded profit in the supply department. The period influenced the introduction of a knowledgeable purchasing agent and decentralization of a purchasing department in the organization. A remarkable event of the period was the identification of the significance of the purchase process in the contribution to the revenue of a company.

Period 3: War years (1940-1946)

The era marked the particular time in the purchase history since more efforts were driven towards obtaining scare resources during the time of war for industrial development. As such, the number of purchase agents increased significantly which also accounted for the increase in the number of institutions that offered courses in purchasing. Furthermore, studies conducted at the time revealed that other departments in an industry recognized the importance of specialized purchase agents.

Period 5: Material period comes of age (Mid 1960's- Late 1970's)

The period witnessed the introduction of material management concept after the Vietnam Wars that resulted in an increase in raw materials prices and shortage in their supply. The overall objective of resource management concept focused on the entire industrial process rather than just single activities; thus, more industrial processes were included in the material umbrella (Monczka et al. 26). Purchase agents provided tenders through competitive price bidding and sort to a strengthened relationship with suppliers to anticipate such a problem in the future.

Period 7: Integrated Supply Chain Management (The Twenty-First century)

The time reflects on modern-day critical concern on the significance of suppliers in any organization in which the company-supplier relationship has shifted from adversarial to cooperative (Monczka et al. 27). Currently, a technologically made supplier chain has been developed to assess, and review all activities of suppliers in an organization. Moreover, the period has modeled purchase in that it has reshaped the purchasing role to suit the current dynamic market environment, technological advancements, and consumer needs. Equally, purchasing has been integrated with human resource, logistics, finance, information systems, and other operations.

List all of the activities under "The Supply Chain Umbrella."
  • Purchasing
  • Production planning, scheduling, and control
  • Inbound transport
  • Quality control
  • Material and inventory control
  • Shipping/warehousing/distribution
  • Receiving, material handling, and stores
  • Customer service
  • Supply and demand management

State three reasons why the Work Ethics Trait of ATTENDANCE is important to you.

  1. It will improve my productivity since I will punctually finish my daily duties without being pushed with the manager or supervisors.
  2. It will enhance cooperation with other workers, whereby through attendance of all signed duties. I will build a relationship with other employers hence establish teamwork for the achievement of organizational goals (Bulog and Grancic 10).
  3. It reduces wrangles with top tier staff and reduces the chances of being punishment authority since I abide with the designated time frame (Bulog and Grancic 10).

Works Cited

Bulog, Ivana, and Ivan Grancic. "The Benefits Of Business Ethics - Ethical Behavior Of Decision Makers: The Empirical Findings From Croatia." Mediterranean Journal of Social Sciences 8.4-1 (2017): 9-14. Web.

Monczka, Robert M et al. Purchasing And Supply Chain Management. Boston, MA: Cengage Learning, 2015. Print.

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