Logistics and Supply Chain
Important Articles About Supply Chain
A Primer on Sourcing and Procurement in an Integrated Supply Chain
Supply Chain Management Review introduces a new series called “Back to Basics.” It’s a look into how excellence in the core logistics and supply chain activities leads to overall business success. The articles in this seven-part series are written by educators from the University of Tennessee. Pictured: Wendy L. Tate, Assistant Professor of Logistics, Department of Marketing and Logistics, University of Tennessee.
By Wendy L. Tate, Assistant Professor of Logistics, Department of Marketing and Logistics, University of Tennessee
October 21, 2010
Globalization, increased competition, fluctuating availability of raw materials and pricing conditions have increased the need for better management of the suppliers who provide goods and services to the organization. According to the U.S. Census Bureau, the cost of purchased materials is approximately 54% of the value of shipments for manufacturers. Also, the cost of services that organizations purchase is continuing to increase as firms try to focus on what they do best.
More emphasis is being placed on spend management and on those that are responsible for locating and managing the suppliers that provide the materials and services needed to meet customer expectations. Sourcing and procurement are generally responsible for this task. A focus on spend management is not new to the purchasing area. But the increasing magnitude of requested reductions is driving purchasing departments to think creatively about ways to more strategically manage the supply base and continue to drive unnecessary costs from everyday purchases.
The task of sourcing and procurement professionals is to find an effective means to balance the demands of both internal and external customers with economic considerations while taking into account the potential for supply disruption and technological change.
The challenge is to establish
A Primer on Sourcing and Procurement in an Integrated Supply Chain
Supply Chain Management Review introduces a new series called “Back to Basics.” It’s a look into how excellence in the core logistics and supply chain activities leads to overall business success. The articles in this seven-part series are written by educators from the University of Tennessee. Pictured: Wendy L. Tate, Assistant Professor of Logistics, Department of Marketing and Logistics, University of Tennessee.
By Wendy L. Tate, Assistant Professor of Logistics, Department of Marketing and Logistics, University of Tennessee
October 21, 2010
Globalization, increased competition, fluctuating availability of raw materials and pricing conditions have increased the need for better management of the suppliers who provide goods and services to the organization. According to the U.S. Census Bureau, the cost of purchased materials is approximately 54% of the value of shipments for manufacturers. Also, the cost of services that organizations purchase is continuing to increase as firms try to focus on what they do best.
More emphasis is being placed on spend management and on those that are responsible for locating and managing the suppliers that provide the materials and services needed to meet customer expectations. Sourcing and procurement are generally responsible for this task. A focus on spend management is not new to the purchasing area. But the increasing magnitude of requested reductions is driving purchasing departments to think creatively about ways to more strategically manage the supply base and continue to drive unnecessary costs from everyday purchases.
The task of sourcing and procurement professionals is to find an effective means to balance the demands of both internal and external customers with economic considerations while taking into account the potential for supply disruption and technological change.
The challenge is to establish
References: Dieselnet (1998). “What’s New? Ford and Mobil Form Strategic Alliance,” Accessed from http://www.dieselnet.com/news/1998/03ford.php on September 20, 2010. Ellram, L.M. and W.L. Tate (2004). “Managing and Controlling the Services Supply Chain at Intuit,” CAPS Research, Practix: Good Practices in Purchasing & Supply Management, Vol. 7, August. Kraljic, Peter (1983). “Purchasing Must Become Supply Management,” Harvard Business Review, September-October, pp. 109-117. By Dr. J. Paul Dittmann, Director of Corporate Partnerships, University of Tennessee October 01, 2010