Organization of logistic management is an important moment in any economic system. The logistics system, in turn, is characterized by complexity and integrity. Since logistics is a very broad and capacious concept, procurement, distribution, production, information and transport logistics are distinguished .
Since the main task of logistics is the integrated management of material flow, procurement logistics plays a special role in this system, which manages material flows while providing the enterprise with the necessary material resources. The input of material flow into the logistics system is carried out directly through the procurement subsystem. That is why logistics at this stage is called that way, however, very often you can find the phrase “supply logistics” or “procurement logistics”.
So, procurement logistics is competent management of material flows, ensuring the supply of material resources to the enterprise. The goal is the full and adequate satisfaction of the needs of a particular production in materials with the greatest possible efficiency. To properly use the concept of logistics at the procurement stage, you need to be prepared for the fact that the philosophy of organizing the process of production of the final product can change, which should correspond to current and potential demand.
The logistics system at any enterprise should be conducted in accordance with one rule: the calculations of all parameters of production and economic activity without exception should be carried out in the opposite direction. In this regard, procurement logistics resembles the production logistics model, or rather its derivative. That is, the calculations of the demand for purchases and the need for them should be carried out from the final product to raw materials, semi-finished products and materials.
However, the principle of such an informational flow does not mean that production and marketing fully control the supply. They also affect the competitiveness of products, their quality and assortment formation. It is procurement that is the main source of information about the capabilities of suppliers and the market of competitors.
There are certain logistic activities that are related to the management of procurement processes, which in principle are synonymous with the concept of “procurement logistics tasks”. Let us briefly examine the essence of each of them.
- Identification and reassessment of needs. Any procurement should begin with a thorough examination of the supply transactions established between the consumer and the procurement department.
- Evaluation and study of customer requirements. After determining the internal customers and the range of resources, it is important to establish requirements for the supply parameters, their size, range of goods and so on. It is necessary to establish those customer requirements that are able to determine the delivery service.
- Making decisions on the possibility of production independently. It often happens that it is more profitable for a company to produce something on its own than to buy from others.
- Types of purchases. Purchases may be ongoing, modified or new. Determining their type will simplify the whole work and the procurement logistics process.
- Conducting an analysis of market behavior.
- Identification of all potential suppliers of a certain type of resources. It is necessary to make a list of firms whose services have not previously been provided.
- Evaluation of all sources of material resources that need to be purchased. It is necessary to conduct a comparative analysis of offers from different suppliers.
- Final supplier selection using multi-criteria assessment.
- Delivery of resources. This process is associated with the supply of material resources of a certain nomenclature, orders, transportation, cargo handling, warehousing and storage of goods.
- Procurement control. When the delivery process is completed, it is necessary to organize quality control of resources and assessment according to various parameters.
All these tasks should be combined with a single supplier relationship policy. Procurement logistics is also engaged in determining the optimal frequency of supplies and the structure of material flows.