Question

what is procurement?

what is stratwgic sourcing?

what is warehousing?

what is distribution

Answer 1

According to the Business Dictionary, procurement is the process of buying or purchasing or obtaining services and products or goods. Procurement involves the demand preparation, processing and payment approval. The various activities of procurement include developing specifications, planning purchase, research and selecting suppliers, analyzing value chains, negotiating price, determining standards, making a purchase, administering supply contract, controlling inventory and handling disposals. A company’s efficient procurement determines its profit on selling its product in the market. Examples - In a grocery store, buying fresh and inexpensive groceries is the main procurement function. In a newspaper office, buying paper at low cost is the main procurement function.
Strategic sourcing is a vital aspect of supply chain management managing the process of procurement for an organization in an optimizing manner through constant evaluation of procurement methods, sources and procedures. Strategic sourcing involves analyzing the supply market landscape, examining purchase budgets, negotiating with suppliers and assessing regular periodic supply transactions. Strategic sourcing is used by companies to achieve a competitive advantage by optimizing their value chain continuously.
Warehousing is associated with the storage and management of materials and goods in the inventory. Warehousing involves the identification, receipt, inspection, putting away, verification, retrieval, physical and administrative functions pertaining to inventory. The key to success in warehousing determining the profit or loss for the company lies in selecting the competent drivers for goods delivery and applying warehousing techniques to manage stock in the inventory.
Distribution is the movement of services and goods from the company premises to the final customer through a channel of distribution in one direction and the movement of payment in the opposite direction to the company. Distribution ensures that the product reaches the customer in a timely manner well before the deadline. Consider the example of purchasing goods from an online store as an example of distribution - You select the product according to your need, preference and place the order online. The shipment or distribution of the product begins and reaches you by the deadline mentioned while making the purchase. You check for the items purchased, return any defective items and pay for the products purchased using any of the payment options provided by the company.