Supply management

The term supply management describes the methods and processes of modern corporate or institutional buying. This may be for the purchasing of supplies for internal use, purchasing raw materials for the consumption during the manufacturing process, or for the purchasing of goods for inventory to be resold as products in the distribution and retail process.

The supply management function of an organization is responsible for various aspects of acquiring goods and services for the organization. In many organizations, acquisition or buying of services is called contracting, while that of goods is called purchasing or procurement

*Managing supplier performance
*Implementing technologies, processes, policies, and procedures to support the purchasing process (Supplier Relationship Management).
* The supplier relationship management process: a process for providing the structure for how relationships with suppliers will be developed and maintained. [See [http://www.scm-institute.org Supply Chain Management Institute] and then click on the 'Our Framework' link and then the 'Processes' link.]
*Economic theories of supply and demand

Supply management is generally regarded as a systematic business process that includes more functions than traditional buying, such as coordinating inbound and internal pre-production logistics and managing inventory.

Supply management deals primarily with the oversight and management of materials and services inputs, management of the suppliers who provide those inputs, and support of the process of acquiring those inputs. The performance of supply management departments and supply management professionals is commonly measured in terms of amount of money saved for the organization. However, managing risk is one of the other critical aspects of supply management; especially the risk of non-availability at the required time of quality goods and services critical for an organization's survival and growth.

Groups and certifications

The importance of supply management in global business has prompted the formation of professional organizations to address the need for higher levels of supply management skill and expertise. One of the largest of these is the Institute for Supply Management [http://www.ism.ws/about/] , a United States not-for-profit association that includes more than 40,000 members. It is affiliated with the International Federation of Purchasing and Supply Management [http://www.ifpmm.org/index.cfm] , a union of local and national purchasing associations with approximately 200,000 members.

For companies seeking to fulfill diversity supplier spend commitments, the National Minority Supplier Development Council [http://www.nmsdc.org/] with 39 affiliated nation-wide councils, was established in 1972 to assist in promoting supplier diversity, and also provides management training and access to viable minority business enterprises.

Many certification programs are relevant to the supply management profession. Some are offered through non-profit associations, such as the Certified Purchasing Manager (CPM) and Certified Professional in Supply Management (CPSM) through the Institute for Supply Management. There are also for-profit companies who offer certification programs, such as Next Level Purchasing, Inc. who offers the Senior Professional in Supply Management (SPSM) Certification.

upply chain management

Supply management is different than supply chain management, though it can be considered a component of supply chain management. Conversely, where the supply management function is established as a C-level strategic effort, supply chain management is but one component of an overall strategic supply management approach. Supply chain management, which can be automated, generally refers to:

*The oversight and management of materials and services inputs
*The production process in which those materials and services are used, and
*The provision of outputs that are generated through the use of the acquired materials and services, which is analogous to the fulfillment of customer requirements.

Supply management is a complementary discipline that encompasses the alignment of organizations, processes, and systems for strategic sourcing, contract management, supplier management, spending analysis to continuously improve global supply for best-value performance in support of the strategic objectives of the business.

upply and Contract Management Software

"Magic Quadrant For Sourcing Application Suites, 2008,” a Gartner research report, summarizes: "Sourcing applications provide a systematic and scalable means for organizations to manage the full sourcing process, including finalizing purchase specifications, selecting suppliers and negotiating prices....Most sourcing solution vendors bundle spend analysis, contract management and supplierperformance management tools into their suites." The Gartner report summarizes, "Best-of-breed providers with suites delivered via software as a service dominate the strategic sourcing application market, while ERP companies with integrated offerings aregaining traction by providing tactical sourcing support." Gartner estimates the sourcing software market at close to a half-billion dollars in 2007 with a annual growth rate of 5%. According to Gartner, the research firm, leading providers of supply and contract management software include Emptoris, Inc., Ariba and SAP. [Gartner, Inc., "Magic Quadrant For Sourcing Application Suites, 2008,” by Debbie Wilson, published April 2008.]

References

External links

* [http://www.massin.nl/eSourcing/ Strategic Sourcing | Europe] - a blog about sourcing and procurement
* [http://www.europeanleaders.net/learninggroups/supplier-relationship-management/ European Leaders in Procurement] - a business magazine for European procurement professionals
* [http://www.supplyexcellence.com Supply Excellence] - a blog about supply management strategies
* [http://www.efficientpurchasing.com Efficient Purchasing] - a magazine for European sourcing and procurement professionals
* [http://www.scm-institute.org Supply Chain Management Institute]
* [http://www.ibxeurope.com/?id=927&cid=3620 The Purchasing Transformation Blog] - A blog covering the purchasing field