Abstract
The management of the processes for the acquisition of raw materials, component parts, and finished goods to service the needs of the customer resides at the very core of competitive supply chain management. Effectively designed and executed procurement processes provide several direct advantages. To begin with, procurement plays a fundamental role in actualizing business and operations planning objectives concerning supply chain delivery, flexibility, quality, and costs. Secondly, the sheer size of procurement directly affects the financial stability and profitability of virtually every trading partner in the channel. Depending on the nature of the product offering, procurement costs alone can range from forty to over seventy percent of each sales dollar. Thirdly, the efficiency and quality of procurement has a direct influence on the capability of the entire supply chain to respond effectively to marketplace demand. Because of its significant impact on revenues, costs, and operational efficiencies, procurement has become a key enabler of supply chain strategy.
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References
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This section has been adapted from Ross, Introduction to e-Supply Chain Management, pp. 263–265.
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Ross, D.F. (2004). Supplier Relationship Management. In: Distribution Planning and Control. Chapman & Hall Materials Management/Logistics Series. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-8939-0_10
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DOI: https://doi.org/10.1007/978-1-4419-8939-0_10
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