The Challenges ahead in Purchasing and Supply Management Essay

The Challenges ahead in Purchasing and Supply Management - Essay Example manufacturing processes, or for the purchase of goods for the inventory that are to be resold as new products in distribution and the retail outlets. Purchasing and procurement have been used interchangeably in many industries2. In many sectors, the acquisition or the buying of services is referred to as contracting, while that of commercial or industrial goods is known as purchasing or procurement. Purchasing needs to satisfy two primary objectives in business. These are to ensure intact operation in the company by facilitating the economic supply of procurement of goods and services and maintaining the profit levels by controlling the flow of money3. In a supply chain management a vendor or a supplier is known to be an enterprise that provides goods and/or services to the buyers in a supply chain. For any business venture as the distributors and the dealers form its one arm, the other arm is formed by the vendors or the suppliers. It is thus essential to form a good bond with the v endor chain4. a. Distribution network configuration which can be the number, location, network connections of suppliers, the production facilities, the distribution centers, warehouses, the cross-docks and their customers5. b. Distribution strategy that will consist of the questions related with control whether it is centralized or decentralized or even shared, the delivery scheme which can be direct shipment, pool point shipping, cross docking, DSD, i.e. direct store delivery, mode of transportation etc. c. Trade-Offs in logistics activities that needs to ensure that the activities are well coordinated in order to achieve the lowest total logistics cost. Trade-offs can increase the total cost if there is only one activity that can be is optimized. The trade-offs are the keys to develop the most efficient and perfect logistics and SCM business strategy6. The petrochemicals industry plays a significant role in many economies. SCM philosophies are used in this sector now-a-days to