Supply chain management involves end-to-end management of various functions/processes in the transformation of

raw material into finished products delivered to customers. The purchasing function of the supply chain has evolved into
a cost-saving function. Cost-saving in this process is achieved through process, product and supplier relationship
developments. Purchasing has become a core competency for any organization. Logistics management helps meet
customer expectations through planning, execution and control of movement and storage of goods, information and
services from origin to destination. A supply chain management system includes software solutions that help in
managing and overseeing the flow of data, goods and finances from the point of origin to the destination.

Purchasing is a subset of procurement. It refers to buying goods or services and often includes receiving and payment.

The steps related to purchasing within the procurement cycle are:

- Purchase Order Acknowledgement

- Advance Shipment Notice
- Goods Receipt
- Invoice Recording
- Three Way Match
- Payment to Supplier

How does Purchasing play a role in Supply Chain Management

A supply chain is the network of manufacturers, suppliers and logistics providers needed to get a specific product to your
business and, subsequently, your customers.

At its core, supply chain management is the act of overseeing and managing a supply chain to ensure it is operating as
efficiently as possible. Predominately it is ensuring that all suppliers and manufacturers are maintaining the desired
quality of production and are engaged in ethical business practices.

The latter point is a significant issue faced by many organizations today. If a piece (or pieces) of a supply chain aren’t
doing business in an ethical manner (think child labor or environmental damage), then the organization receiving goods
from that supply chain can suffer negative repercussions.

Supply chain management should ultimately be considered one of many responsibilities faced by a procurement
function. By highlighting these differences, we will get a better, more fulsome understanding of the intricate
procurement world.

Purchasing, materials handling, logistics, transportation, inventory control, and supply chain management have
continued to evolve, causing many of these functional areas to intersect with one another. This intersection has resulted
in blurred definitions for some of these terms such as logistics and supply chain management.