What is the supply chain? How should procurement management be done?

What is the supply chain? How should procurement management be done?

In the e-commerce sector, there are generally two different types of sales. These can be examined in two main groups as products and services. If it is a product sold through the online store, its production and supply must be planned. Therefore, Supply Chain Management comes into play at this point.

Supply chain management is a form of management that integrates the flow of materials, information and money that enables the right product to reach the customer at the right time, at the right place, at the right price and at the lowest possible cost for the entire supply chain. The integration of basic business processes in the chain and the creation of strategies and models that will increase customer satisfaction are also included in this management system.

Long before e-commerce took its current form, in the 1990s, supply management was described as a process consisting of product procurement, storage and shipment. However, this management style has changed with the developing information technology. Companies that are not manufacturers can now supply their products directly using the channels of manufacturers, distributors and wholesalers. In fact, as many successful e-commerce sites have done today, it can supply the same product through multiple channels and offer it to its customers at more affordable prices.

What is the supply chain?

The supply chain is the connection and movement process of products between suppliers, manufacturers, wholesalers, distributors, retailers and finally consumers. It consists of a wide range from the production of the goods to the supply and delivery to the consumer. Apart from this, the supply chain includes many other areas such as sales process, production, inventory management, material supply, distribution, procurement, sales forecasting and customer service. Therefore, it is necessary to examine the concept of supply chain well in order to have a general knowledge of all this systematic.

What is the supply chain?

Within the supply chain management;

Where the production will be done and what will be the best sourcing strategy. Creating short-term processes such as forecasting, planning and procurement time, overtime schedule, Inventory distribution, detailed scheduling and how to obtain orders in case of any malfunction.

Using information management and operations research mathematics within the supply chain management process, it is aimed to provide a good product service to ensure that customers are satisfied. In this technical nature, advanced software, relational databases, etc. technical tools are used.

What are the main functions of the supply chain?

Functions accepted as each link of the chain in supply chain management must be integrated. A series of functions and tasks are fulfilled in line with six basic objectives in reaching the products from the supplier to the consumer.

  • Demand and order management
  • Buy
  • Planning
  • Production
  • Inventory (Stock) management
  • Warehouse management
  • Shipment (Transport)

Thanks to the supply chain, you can improve your delivery performance and reduce your inventory. In addition, the order fulfillment rate increases. The supply chain improves the accuracy of demand forecasts and shortens the supply cycle time, reducing logistics costs. In this way, efficiency and capacity increase is provided.

When we look generally, it is possible to see that both customer satisfaction has increased and the total cost has decreased. Even when we look at all these data, it is possible to see how important the supply chain is in terms of e-commerce.

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