In the realm of supply chain, purchasing plays a vital role in acquiring materials and services. However, as outsourcing, globalization, and supply chain management have gained significance, strategic responsibilities have also expanded.
It is crucial to comprehend the connection between various aspects of supply chain management, including purchasing, procurement, materials management, and supply chain management.
Buying is a component of acquiring; acquiring is a component of managing materials; managing materials is a component of managing the supply chain.
Business Continuity Planning – plans to ensure that an organization can continue to deliver products or services at acceptable predefined levels following a disruptive incident. The plans are developed by identifying potential threats to an organization and the impacts on business operations those threats might cause. These plans provide a framework for building organizational resilience with the capability of an effective response to safeguard the interest of key stakeholders, reputation, brand, and value-creating activities.
Materials Management – The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of work in process to the warehousing, shipping, and distribution of the finished product.
Supply Chain Management – The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.
When it comes to purchasing, procurement, materials management, and supply chain management, sourcing plays an important role. On the other hand, inventory is primarily involved in procurement, materials management, and supply chain management. It’s worth noting that while inventory is not a part of purchasing, it does fall under the umbrella of procurement.
Inventory – Those stocks or items used to support production, supporting activities, and customer service. Demand for an inventory can be dependent or independent. Inventory functions are anticipation, hedge, cycle, fluctuation, transportation, and service parts.