Question

Explain the following and how each impact the supply chain - procurement, logistics, and materials management.

Answer 1

Procurement is nothing but a process of getting the goods in the company, these goods is necessary to run the business. This would range from even handling the inventory to negotiate the price and even beyond. The supply chain is impacted as after this process the chain of delivering the final good to the customer starts and hence procurement has to be more than perfect to reduce the operational costs and increase the profits.

Logistics is the entire handling of the flow of goods from the warehouse to the doors of the customer i.e. it will include entire transportation, supply chain is impacted as logistic is responsible for delivering goods at all nodes of the supply chain. Better the logistics better the supply chain for the company.

Materials management is ensuring that all materials are flowing as per the pre-decided format i.e. planning is adequate, controlling is adequate and no wastage is there in the flow of materials from one destination to another, supply chain is affected as if the materials management is not there then there would be delay in delivering the final and quality goods to the customer which is a negative for the entire organization as well as specifically supply chain management of that organization.