chapter  10
24 Pages

Purchasing and supply chain management

To any business, purchasing and supply of materials, products and services is important in financial, operational and strategic terms. The cost of materials purchased is normally a large proportion of an organization’s spending. In addition, the quality of input resources can affect the quality of operations outputs. Running out of materials and dealing with suppliers who fail to meet the purchase specifications will result in delays and reworks that can have serious implications on the efficiency by which goods and services are produced. Hence, strategically it is important to a firm to get its suppliers involved in planning and understanding the organization’s long-term goals and, in particular, the company’s quality objectives.