Abstract
Without much argument, it can be said that the procurement function is an essential function found at the core of all organizations. The acquisition of materials, components, finished goods, service inventories, and support services is a fundamental activity found in all industries. 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 production, supply chain delivery, flexibility, quality, and costs. Second, the sheer financial impact of procurement directly affects the financial stability and profitability of virtually every trading partner in the supply channel. Depending on the nature of the business, procurement costs alone range from 40 % to over 70 % of each sales dollar. Third, the efficiency of procurement has a direct influence on the capability of the business and the entire supply chain to respond effectively to marketplace demand. Because of its significant impact on revenues, costs, and operational efficiencies, procurement is a key enabler of supply chain strategy.
The original version of this chapter was revised. An erratum to this chapter can be found at https://doi.org/10.1007/978-1-4899-7578-2_16
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References
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Ross, D.F. (2015). Procurement and Supplier Management. In: Distribution Planning and Control. Springer, New York, NY. https://doi.org/10.1007/978-1-4899-7578-2_11
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DOI: https://doi.org/10.1007/978-1-4899-7578-2_11
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