Western Illinois University: Macomb Campus
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Management and Marketing
Learn More About Supply Chain Management
A method of managing procurement processes for an organization in which the procedures, methods, and sources are constantly re-evaluated to optimize value to the organization. Strategic sourcing, which is considered a key aspect of supply chain management, involves elements such as examination of purchasing budgets, the landscape of the supply market, negotiation with suppliers, and periodic assessments of supply transactions.
Except for the actual purchase price of items, transportation is the largest of all logistics costs. Transportation includes the management of modal and carrier selection, the negotiation of rates and services, and the scheduling of the delivery and services that transportation provides. Basically, successful transportation gets everything to where it is needed, when it is needed.
The overall management of the way resources are obtained, stored and moved to the locations where they are required. Logistics management entails identifying potential suppliers and distributors; evaluating how accessible and effective they are and establishing relationships and signing contracts with the companies who offer the best combination of price and service. A company might also choose to handle its own logistics if it is cost-effective to do so. Logistics has both domestic and global elements including transportation, warehousing, inventory control, material handling, packaging, and documentation.
The movement of goods and services from the source through a distribution channel, right up to the final customer, consumer, or user, and the movement of payment in the opposite direction, right up to the original producer or supplier.
Directing or conducting the activities necessary to reduce, eliminate or mitigate the impact of factors that could lead to injury, loss, damage or failure.
Inventories are stockpiles of raw materials, supplies, components, work in process, and finished goods that appear at numerous points throughout a firm's production and logistics channel. The inventory decisions involved in determining how much, where to locate, when to have, and many other issues are complicated and must look throughout the entire supply chain. The basic goal is to have the stuff you want where it is needed, when it is needed.