What is the difference between supply chain purchasing management and traditional purchasing management

Martin Christophe, a famous British supply chain management expert, said: “the real competition is not between enterprises, but between supply chain and supply chain.”. When the competition between enterprises rises to the level of supply chain competition, enterprises continue to cling to the incomplete, immersed in the traditional procurement management mode? Or actively embrace the new era of supply chain procurement management? Obviously, no one is willing to lag behind, let alone be eliminated by the times and the market. Why are there many enterprises that have not completed the transformation from traditional to supply chain procurement management? The reason is that: there is no in-depth understanding of the difference between supply chain procurement management and traditional procurement management. In other words, the benefits and temptations of supply chain procurement management are not big enough!

In this case, let’s share some differences between supply chain procurement management and traditional procurement management today to see what the charm of supply chain procurement management is? In case of such a problem, someone will tell you without hesitation: supply chain procurement management can further enhance the core competitiveness of enterprises. It’s true, but not too empty? Let’s go on combing.

The value of purchasing management lies in that if it can help enterprises produce great value-added ability, it is the key to choose more advanced mode of purchasing management. So what are the differences between supply chain procurement management and traditional procurement management? Let’s take a brief look at the picture below.

General textbooks are so detailed to compare, usually from the definition, procurement nature, environment, information, inventory, distribution, bilateral relations, inspection and other aspects to distinguish. In fact, in the traditional procurement mode, procurement management focuses on the management of internal resources, pursues the optimization of procurement process, the monitoring of procurement links and negotiation skills with suppliers, and lacks cooperation with suppliers, which is just one of them. When we strip away all the details, we will find that the main difference or difference between them is that the traditional procurement management is more like a single line mode of daily shopping, while the supply chain procurement is more like a scientific and intelligent multi combination mode.

When we go to the vegetable market to buy vegetables, we will bargain with the peddlers and strive for the lowest cost to realize the appeal of low price and good quality. At the same time, we will also buy some unnecessary things on the spot to go home. Supply chain purchase management is to place orders according to demand, which is equivalent to taking out mobile phones at home and buying some things we urgently need at this stage. There are strict quantity and quality regulations, and the information of both sides is smooth. Because our purpose is strictly to meet the demand, 0 inventory can avoid the waste of resources, while traditional procurement management contains a lot of random and improvisational content, it is difficult to strictly achieve 0 inventory.

Of course, some people say that there is a difference between personal consumption and enterprise procurement in terms of magnitude and process, which is not denied. When it comes to the essence, it is also a purchase behavior, only a data-based, complex and simple connection in details and processes. How about, in this way, the advantages of supply chain procurement management are obvious enough. Besides, to be naked means that the game of maximizing one-to-one benefits and the ecological chain of forming a symbiotic relationship between value and demand by a group of people. Which is more advanced? The latter, of course!

At present, most enterprises have gradually upgraded to supply chain purchasing management. Of course, such a huge supply chain cannot be handled manually, which involves choosing what kind of management software. Cloud ERP is undoubtedly a popular enterprise management software in this era, in which the integration function of enterprise finance, procurement, business and other links is very powerful. For example, the common SAP cloud ERP can create an end-to-end supply chain management for enterprises to optimize the supply chain. The purchase suite will comprehensively control the process and data in the purchase management, and realize the interconnection with the enterprise departments and the supply chain, which is very intelligent.

For a more comprehensive understanding, consult the acloudear — SAP partner.

This article "What is the difference between supply chain purchasing management and traditional purchasing management" by AcloudEAR. We focus on business applications such as cloud ERP.

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