The Supply Management Process

The Supply Management Process

 

The supply management process starts with need recognition and ends with monitoring suppliers and relationships.  The step include:  recognize and describe the need, identify potential suppliers, select suppliers, determine price and terms, follow-up and expedite, receive, pay invoices and monitor.

 

Managing the supply management process considers the flow of information, materials services, and capital through out the process no matter how many functions or departments touch it.  Waste is driven into the process in the forms of unnecessary costs, long cycle times, and missed opportunities because the buying organization, operating out of functional silos, manages this process sequentially rather than simultaneously.  Five major reasons for developing a robust process are as follows:

 

  • Large number of items
  • Large dollar amounts involved
  • Need for an audit trail
  • Severe consequences of poor performance
  • Potential contribution to effective organizational operations inherent in the function