Supply Chain Management

Changes in the business environment have made it necessary for all the departments of an organization to work cooperatively to achieve the goals of the organization. The purchasing department's role has also undergone major changes, and it has established itself as an important element in supply chain management.

The shift in the role of the purchasing function can be seen by looking at the evolution of the purchasing function over the last few decades. The five stages are transactional stage, price negotiation stage, coordination stage, cross-functional purchasing stage and external integration stage. Before an organization decides on its suppliers, it should decide whether it should make or buy the required input.

After this decision is taken, it has to consider how it will select and mange its suppliers. Supplier selection is very important because today, most companies aim to build long-term relationships with their suppliers. While discovering potential suppliers is not a difficult task given current technological advancements, evaluating them needs careful attention.