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General




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.

Tasks associated with supply management include:

  • Analyzing spending
  • Strategic sourcing
  • Obtaining and evaluating quotes from suppliers
  • Negotiating
  • Managing supplier performance
  • Implementing technologies, processes, policies, and procedures to support the purchasing process (Supplier Relationship Management or SRM) - There are several companies have the software to implement SRM. Take a look at these SAP links:
  • 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.

The increased importance of supply management in today’s dynamic global business environment has brought a need for higher levels of skill and expertise on the part of supply management professionals. Throughout the years, many professional organizations have been formed to address these needs and improve the field of supply management. One of the largest of these associations is the Institute for Supply Management™ (ISM)[1]. Founded in the U.S. in 1915, ISM’s membership base includes more than 40,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit association whose mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education. It is affiliated with the International Federation of Purchasing and Supply Management (IFPSM) [2], a union of local and national purchasing associations worldwide which encompasses approximately 200,000 members.

For companies seeking to fulfill diversity supplier spend commitments, the National Minority Supplier Development Council [3] 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 managment profession. Some are offered through non-profit associations, such as the Certified Purchasing Manager (C.P.M.), 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.

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