TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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Procurement is the act of finding and obtaining the goods and materials that your business requires to satisfy its operational requirements. Supply chain management, on the other hand, deals with the processes that support the replenishment of your inventory. Both are necessary for your business to thrive. Supply chain management deals with items like production, transportation and storage. With these three elements, you can guarantee that your business will have a smooth operation.

On the supply side, there are processes like material transportation and warehousing. There are also processes like making an inventory, which involves gathering information about the current inventory and the status of stocks. This information is important so that you can know if there is a need to increase or decrease in your current stock. You can also determine whether to increase or decrease your production levels depending on the demands from your manufacturing operations.

On the other hand, inventory management focuses on the distribution of goods to your customers. This is where you identify how many of a certain good are in stock and how many you need to purchase to meet the current demand in the market. And then, the demand is estimated by considering how many goods are still being produced at a level enough to meet the supply. Lastly, there is materials management which focuses on the supply, processing and storage of raw materials and goods. This also involves the supply chain of these goods and materials. This includes the purchase of materials, the construction of finished goods, and the storage of finished goods until they are sold.

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