A) The definition of purchasing and supply management and the Essay

A) The definition of purchasing and supply management and the importance to the business world - Essay Example All the activities carried out under purchasing and supply management, call for cost-effectiveness. Individuals assigned the tasks of purchasing and supply management have to apply tactics and strategies when selecting suppliers and negotiating prices. This paper provides a discussion of purchasing and supply management. The discussion includes the importance of purchasing and supply to the business world, steps in creating project supply, service, and material budget, selecting suppliers, strategies for negotiating prices and costs of outsourcing. The paper concludes by evaluating organizations that are benchmark in purchasing and supply management. Purchasing entails acquiring goods and services necessary for the organization’s day to day operation or manufacturing of products. Supply management, also referred to as supply chain management is the process employed by organizations with the objective of having a cost-effective and efficient supply chain. In commerce, through purchasing, industries and public corporations procure raw materials, supplies and services. The important processes included in purchasing are identifying the needs, selecting the supplier, negotiating appropriate price, reviewing the terms and conditions, issuing the order or contract, and finally, follow up on the delivery. Basically, purchasing is centered on the task of ensuring that materials or products, which are of right quantity, quality and price are obtained from the selected supplier at the right time and place. Purchasing is done either for resale by retailers and wholesalers or for transformation that is industrial purchasing (Benton, 2 006). A supply chain in most cases comprises five important stages, which are plan, develop, make, deliver and lastly return. In supply chain management, the first stage, known as a plan is to determine how goods and services will satisfy customers’ requirements and needs. Develop, as the