Procurement and Sales

Procurement and Sales

1. Purchasing

   • Definition: “Managing the company’s external resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company’s primary and support activities is secured at the most favorable conditions”.
   • Contains: All activities for which the company receives an invoice from outside parties. Differentiation between: Purchasing function Purchasing department
   • Purchasing Management: All activities that are required to manage supplier relationships.
   • Purchasing Process van Weele (2005): Define Specification -> Select Supplier -> Contract Agreement -> Ordering -> Expediting -> Evaluation
   • Purchasing Process Reijniers, Gaspersz, Marijnen and Roddeman (2009): Strategy Development -> Define Specification -> Select Supplier -> Contract Agreement -> Ordering -> Expediting -> Evaluation

2. Procurement

   • Contains: All activities that are required in order to get the product from the supplier to its final destination.

3. Sourcing

   • Contains: Finding sources of supply, guaranteeing continuity in supply, ensuring alternative sources of supply and gathering knowledge of procurable resources.

4. Supply Chain

   • Supply Chain management
     • Contains: The management of all activities, information, knowledge and financial resources associated with the flow and transformation of goods and services up from the raw materials suppliers, component suppliers and other suppliers in such a way that the expectations of the end users of the company are being met or surpassed

5. Value Chain

   • Value Chain Management
     • Contains: Challenging suppliers to improve the value proposition to the end-customers of the value chain. Usually the supplier works closely together with the customer’s technical and marketing staff to reduce the product’s overall costs and add new designs or features to the product which increase the value for the end-customer.