Unit 2: Supply Chain Procurement
As we saw in Unit 1, there are many steps in the supply chain management process. However, nothing can be accomplished if an organization does not choose the right suppliers of goods and raw materials. There are several ways an organization can manage this process; the most prominent among those are "lean" and "agile". Lean focuses on reducing waste and identifies seven wastes that should be eliminated for a lower-cost and more efficient operation. Agile focuses on the need to be flexible and to be able to respond to rapid changes in the market or in customer demand.
Once an organization has determined the process for obtaining materials and resources, it must choose the suppliers that will best meet its needs. Some of the questions a company must ask of their suppliers will focus on quality, timing, and reliability. It is also important to implement good procurement practices, so there is consistency and efficiency throughout the process. This helps to identify hidden costs so that they can be addressed and eliminated. Organizations must find the strategy that is the best fit for their operations, and determine which method can best meet their needs and goals.
Completing this unit should take you approximately 1 hour.