The department of material and technical supply is a unit whose activities are aimed at providing the necessary production resources. Moreover, this activity should be carried out before the very beginning of the production process: from the emergence of such a need for resources to their use during the manufacture of products.
Definition of key terms
The supply department operates in the framework of the commercial activities of a business entity, which implies the implementation of various trade operations related to the acquisition of necessary resources and the sale of manufactured products. The optimal organization of this structural unit is to some extent determined by the level of use of funds in production, growth in labor productivity, reduction in production costs, increase in profitability and profit of the enterprise. The same role is played by the department of material supply in the management of production.
The main objective of this unit is to bring specific resources to the participants in the production in the required quantity and volume, on time and with minimal cost.
The supply department has a targeted nature, which is determined by its focus and the purpose of ensuring the functioning of the production enterprise. First of all, we are talking about the needs of various consumers of products, services or works of a given business entity.
Procurement Department: its role and importance
Its role and significance are as follows:
- the activities of this unit precedes production and not only serves to provide resources for the production process, but also independently creates, in a certain sense, its price and consumer value ;
- defines and shapes both the economic results of the business entity and the resource requirements and finished products of the consumers themselves;
- designation of the financial results of a manufacturing enterprise;
- as a type of activity of the enterprise is the main source of its competitiveness.
A significant share of material costs in total costs (about 60%) also confirms the significant importance of material and technical supply.
The main tasks and functions of the supply department
1. Provision with subsequent maintenance of the optimal level of resource reserves, which will help minimize the costs associated with their procurement.
2. Ensuring accurate, efficient, comprehensive and sufficiently reliable supply of resources to consumers (sometimes even to the workplace).
The supply department performs the following functions: commercial and technological, as well as auxiliary and basic. The main functions include the acquisition of a resource, and the auxiliary functions include marketing and legal support.
Supply categories
In modern large companies, employees of the supply departments are divided into several categories. This is due to the constant growth of volumes at enterprises, which entails the differentiation of the functions of planning, supply and conservation of goods. With this structure, each unit performs its functions and has a specific direction. Coordination of work within these structural units is carried out by the head of the procurement department .
Supply Chain Structure
In the framework of such an organization of work, each individual unit should be responsible for a certain group of goods with full control over the supply of resources and their storage in warehouses.
It should be noted that the structure of the supply system is the main tool to achieve the goal of any business entity that carries out its activities, for example, in the field of trade. Therefore, the process of structuring the logistics unit must be given close attention.
The procurement department is also known under another name - the "procurement department." This unit is formed depending on the number of suppliers and the range of imported goods. Product turnover must also be taken into account. Often in companies in such departments there are more than ten suppliers per employee. Basically, work areas are fixed depending on the types of goods or product groups. Ordinary employees track the delivery of goods, the timeliness of payment for their delivery, and also plan further purchases. The head of the supply department monitors the implementation of the approved procurement plans, monitors the turnover of goods, oversees the work of managers and, of course, carries out general management. His responsibilities include ensuring the continuity and planning of supplies.