Procurement and other logistics concepts

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Businesses need access to the materials and products they need to meet their customers' demands.

A constant and adequate supply is crucial for optimizing the supply chain, reducing costs and maintaining competitive advantages in the market. But what would happen if the correct strategy was not designed? This would lead to production delays, loss of sales and customer dissatisfaction, among other negative consequences for the company.

In this post we explain the purchasing and supply functions within the overall management of the business.

What is provisioning?
Its main objective is to make all raw materials or products available to the company at the right time and place, with the required quality and at the lowest cost, in order to optimize the supply chain.

Supply management includes two functions:

Optimizing purchases
Its purpose is to acquire materials greece phone data and supplies from suppliers at the best price, quality and time possible . Its functions include identifying and evaluating suppliers, negotiating contracts, placing orders, and monitoring deliveries and payments, among others.

When purchasing, the following objectives should be pursued :

That the purchase price is at the lowest possible cost.
That the order is delivered at the right time and in the appropriate quantity.
That quality standards are maintained.
That the goods supplied are environmentally friendly.
Some types of purchase :

By reorder point. An order is placed with the supplier when the stock of a certain material or product reaches a certain level.
By program. The quantities and times at which purchases will be made are detailed.
Open programs. The dates on which orders are to be placed are set, but the quantities are established later.
Sporadic orders. They are made due to a specific need.
Speculative orders: These are placed to take advantage of a low price situation.
Stock management
First of all, it is important to know that when we talk about stock we are referring to the set of articles or materials that a company stores awaiting their use or subsequent sale . Its level may vary as entries or exits occur in the warehouse.

Therefore, stock or inventory management involves the process of planning and controlling stocks, with the aim of ensuring that the company has the necessary products to meet demand, while avoiding having excess inventory that could generate unnecessary costs. Therefore, it is essential to determine some variables:

The stock level of each item , that is, the units that will be stored of each item.
Time to place orders.
Quantity to be requested in each order.
Incorrect stock management can lead to reduced profits or even huge financial losses for companies. Modern methods today aim to keep stock to a minimum while maintaining responsiveness.

One of the most widely used methods in stock management today is Just in Time, which consists of storing only the products that are needed to meet daily demand or consumption.