Logistics. Basic Supply Concepts (Most Important)

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Logistics. Basic Supply Concepts (Most Important)

Lecture notes, cheat sheets

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34. BASIC SUPPLY CONCEPTS

Supply - this is an activity that includes the procedures for the purchase, delivery, acceptance, storage and pre-sale preparation of products.

Supply management - is the activity of coordinating the interaction of participants in the supply chain in order to provide added value for consumers.

Supply policy - these are general recommendations on the basis of which the purpose, purpose and aspects of the activity of the supply unit of the enterprise are determined.

Supply policy content:

1) description of the organizational structure of the supply unit;

2) regulation on valuable purchases;

3) regulations on the ethics of supply activities.

Supply Functions:

▪ identification and study of sources of resources and suppliers of products;

▪ determining the need and calculating the quantity of ordered products;

▪ order decision;

▪ establishing the quantity and timing of deliveries and monitoring them;

▪ inventory management;

▪ accounting and control of the progress of fulfillment of contractual obligations.

Supply principles:

1) regularity - delivery of products on the basis of planned delivery schedules;

2) rhythm - the delivery of products at relatively regular intervals, which creates optimal conditions for the operation of wholesale and retail trade enterprises, warehouses, transport and other parts of the supply chain;

3) efficiency - the implementation of the process of supplying products depending on changes in demand for it;

4) efficiency - the minimum cost of working time, material and financial resources for the delivery of products. It is achieved through the efficient use of vehicles, the mechanization of loading and unloading operations, the establishment of the optimal link in the supply chain;

5) centralization - supplying consumers with products by the forces and means of suppliers;

6) manufacturability - the use of modern procurement and supply technologies.

Development of a supply program - determination of the type and quantity of products purchased in various markets, as well as the time of purchase of a particular type of product.

Supply chain challenge - ensuring the planned level of customer service with minimal total costs.

Supply system requirements:

1) ensuring a continuous flow of products: ensuring a continuous flow of raw materials, components and the provision of services necessary for the life of the enterprise;

2) inventory management: bringing together the level of investment associated with stocks of products, and the cost of maintaining them;

3) maintaining the level of quality of customer service;

4) work with suppliers: search for competent suppliers;

5) standardization: buying standard products where possible;

6) achieving a minimum total cost of service, the procurement process requires the availability of products and services at the lowest cost;

7) ensuring the competitive advantage of the enterprise;

8) development of relations and achievement of harmonious, productive and working relations with employees of other functional divisions of the enterprise;

9) ensuring supply while reducing overhead costs. Reliability of supply is the guarantee of providing the consumer with the products he needs within a planned period of time.

Author: Shepeleva A.Yu.

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