What is Supply Management?

Supply management involves checking inventory.

Supply management is a term used to describe the processes used by many companies to acquire, inventory and distribute items that are used in the ongoing operations of the business. The supply management process is concerned with the raw materials used in production as well as office supplies, components for machine repair and any other items that are used internally for the ongoing operation of the company. One of the main goals of effective supply chain management is to balance the need to have items on hand when needed with keeping less inventory, allowing the company to carry less overhead.

Supply managers are responsible for purchasing new office equipment.

For many companies, the supply management process starts with a central purchasing department or group. This group actively coordinates the purchase of raw materials, spare parts and supplies, and even items such as copy paper, pencils and printer cartridges. A purchasing group will seek to find cost-effective suppliers and establish relationships that allow the company to purchase items on an as-needed basis or on a predetermined schedule that can be changed if necessary. The group then coordinates the delivery of the items so that they arrive at the factory premises just before they are needed.

Automated systems can enable managers in large companies to quickly and accurately inventory resources and supplies.

For many people involved in supply management, a time-honored concept that governs the overall process is known simply as usage. Usage refers to the number of units of a given item that are routinely used in a given period of time, such as a month. Determining average usage is useful for the supply manager as it allows you to project when current inventory will run out and you will need to order more units for delivery just before they are needed.

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A supply manager in a small organization can find suppliers and authorize purchase orders as well as guarantee delivery.

By coordinating purchase with usage, the supply management process accomplishes two things. First, the process allows you to design and maintain a viable budget, ensuring that the materials and other items needed to keep the company running are always present. Second, effective supply management also facilitates the practice of responsible inventory control, keeping the number of available units of any item within a certain level and thus minimizing the tax burden that companies pay on raw materials, products in process and finished products.

Delivering copy paper and ink cartridges to offices is a typical component of supplies management.

In the past, the supply management process relied heavily on a manual record-keeping process that tracked the order, receipt, and disbursement of each item purchased for business use. As part of these manual records, it was essential to calculate usage based on issue dates for different departments in the company. Today, supply management software handles many of the calculations automatically as receipts and disbursements are entered into the database. This enables supply managers to quickly run reports that indicate which items should be reordered in the next week and how many of each item should be reordered.

Effective supply chain management seeks to balance the need to maintain an appropriate level of inventory with the maintenance of low overhead costs.

Some of the more robust supply management software programs are even capable of creating electronic and printed internal order approval forms, such as requisitions that are forwarded to a central purchasing department and given an invoice number to be referenced in the actual order. Software of this type can often create order fulfillment forms and distribute copies to authorized departments once the materials are actually received at the location where they will be used.

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