Purchasing and supply chain management are key aspects of any business, regardless of its size or the industry it’s in. 

These two functions work together to provide products and services to consumers, while also ensuring that your company makes money and grows. 

Here are six things you need to know about purchasing and supply chain management to be successful at either function in your organization.

1) A Process is Needed

Applying purchasing and supply management skills learned are not as simple as many people think. You need a process that works for your company, but it also has to work in terms of its integration with other processes.

Look at how you do business now, determine what needs to change, and then devise a way of doing business that is better than anything else currently out there. 

Some things might work perfectly well with no changes whatsoever, but some changes are going to have an enormous impact on your overall process. 

It’s very important not to limit yourself by thinking ‘this is how we’ve always done it.” If some aspect of your process is holding back growth or making life unnecessarily difficult, then ditch it!

2) Quality Control Is Required

When conducting any sort of transaction in your company, especially a large-scale one, you must verify that all aspects are executed exactly as planned. 

To confirm compliance, businesses can utilize quality control processes. Quality control can apply to manufacturing, sales, or any other business venture. 

When conducting transactions in bulk for an entire year or even several years, though, there’s added pressure on a company’s purchasing department—especially when it comes time to negotiate a contract. 

Skimping on quality control could lead to expensive mistakes later down the line.

3) Inventory Management Is Important

Taking care of your inventory is critical. Having a sufficient inventory provides your business with added flexibility, allowing you to respond quickly to changes in demand and stay competitive. 

If your inventory is insufficient, however, it can become difficult or impossible for customers to buy from you. This can damage customer relationships, hurt future sales and discourage new business from coming through your door. 

Be proactive and know how many products your customers are going through every day so that when demand starts shooting up, you have enough products on hand for everyone who wants them.

4) Suppliers Can Help With Supply Chain Management

Procurement professionals are responsible for coordinating an enterprise’s entire supply chain but don’t make the mistake of thinking procurement is a department only focused on buying products. 

Procurement isn’t just sourcing raw materials. It also manages logistics and supply chain processes. 

Supply chains can be complex systems; understanding how your suppliers can help make your process easier will give you a competitive advantage over other companies. 

5) Keep Track of Cost

Costs can pile up quickly if you’re not careful. Watch out for supplies, shipping costs, storage fees, overhead expenses, staff wages, and any other costs that could affect your bottom line. 

Don’t forget: just because a product is cheap doesn’t mean it’s cheap to manufacture or buy wholesale. 

Sometimes expensive products will save money in the long run if they cut down on production time or shipping costs, even though they might cost more upfront. 

Make sure all your pricing points are adding up correctly.

6) Involve Key Players in the Process

Supply chains are more fluid than ever, yet so many companies still conduct business as though their procurement departments will be able to meet their needs under any circumstance. 

The days of us getting what we want when we want it is over. The best way for companies to avoid supply-chain disruptions is to create a global procurement council that consists of a mix of executives that can identify opportunities and challenges within their organization’s value stream. 

Taking time to understand consumer demands, along with changes in regulatory environments, technology innovation, and labor pool concerns, allows every executive on your council to have an understanding of how changes in supply chain management will affect other parts of your company. 

This multi-disciplinary approach makes collaboration the lifeblood of any successful supply chain. And makes it much easier than trying to assemble a team from multiple silos across different organizational units or divisions.

Conclusion

Businesses rely on their supply chains every day. From procurement to transportation, to physical goods your company can’t survive without an effective supply chain. 

Of course, as your business grows, it might take more than one person or department to oversee everything that comes with inventory management. 

So make sure your employees have a solid understanding of what’s going on in those warehouses before it costs your company money.