Procurement & Supply Chain Collaboration

While procurement and supply chain management are closely related, they are not one in the same. While these two functional groups are intended to work in conjunction, many times the supply chain as a whole suffers from a lack of procurement-SCM collaboration. Procurement is defined as the process of acquiring goods and services that your company needs to fulfill its business model. This entails a variety of other services such as contract negotiation, financing and more. Supply chain management is every activity involved in putting products in the hands of consumers. It includes a variety of supply chain operations such as manufacturers, wholesalers, transportation providers and more.  SupplyChain247.com recently published an article detailing the six functional procurement areas that can be improved by considering supply chain issues. These areas include: demand planning, inventory planning, leadtime optimization, product lifecycle management, footprint design and capacity planning. Working with supply chain managers to improve these areas can result in notable supply chain improvements. The top five benefits business realize when procurement and supply chain managers work together are supply chain risk reductions, improved customer satisfaction, cost reductions, improved flexibility and improved supplier relationships. The most advanced and efficient supply chain utilize technology in order to improve collaboration between these groups. The most frequently used technology is electronic data interchange (EDI), automated data collection (ADC) and warehouse management software (WMS). These three technologies can improve communication and available inventory data to make the procurement-SCM relationship operate seamlessly. Make the most of your functional teams by giving them all of the tools they need to work together to meet a common goal. To learn more about the importance of the procurement-supply chain management relationship and how to improve it contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext 243.