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What is Supply Management?


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Supply Management: Maximizing Opportunities, Managing Risk.

Supply management professionals control trillions of dollars.

Every organization — whether manufacturing or service, large or small — employs at least one person who is involved in supply management activities.

The position title(s) may not include the words "supply management," but supply management processes and activities must exist for an organization to survive.

Institute for Supply Management™ (ISM) defines supply management as the identification, acquisition, access, positioning and management of resources and related capabilities the organization needs or potentially needs in the attainment of its strategic objectives.


Supply management activities include:

In a large organization, there may be several thousand supply management employees working on various projects and reporting to a senior level supply management professional.

In smaller organizations, there may be only one person handling several supply management functions.

Supply management has grown from a tactical function of purchasing/procurement into a key strategic role. within organizations. Supply management now:

  • Improves the bottomline
  • Acts as an information source
  • Increases efficiency and productivity
  • Improves competitive position and customer satisfaction
  • Impacts the organization's image and social policy
  • Trains the organization's future leaders

Supply management exists to explore business opportunities and implement supply strategies that deliver the most value possible to the organization, its suppliers and customers.

Because strategic supply management is key to gathering market intelligence and developing cost reduction processes, the organization benefits the most when the top supply management professional is a member of the organization's senior management team. In this leadership role, supply management professionals must be knowledgeable and understand all areas of the business in order to develop strategies consistent with the organization's goals and successful business procedures.

With the increasing technology and demand for global operations, supply management is often involved in finding sources for products and/or services from international suppliers. An understanding of global business concepts is increasingly important for those in the profession.

Supply management activities directly impact an organization's profitability and operational success.

Key Terms

 
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