3.3.2 - The role of procurement GapFill

When a business trades, it will need to work closely with suppliers.  This may be suppliers of raw   flannel drapery materials muslin  such as steel or fabric, or this may be suppliers of component parts such as headlamps or satnav units in car assembly plants.  The suppliers may be companies that can deliver consumables such as paper and ink, or maybe provide extra staff for events such as festivals.  In short, a supplier is any company that can provide a business with resources that it needs.

In order to remain   compete competitive capitalistic aggressive , businesses are looking for ways to cut costs so that they can keep prices low.  This is where a just-in-time system, or JIT, can help a business to become more cost-efficient.  JIT means that goods are delivered just as they are needed.  For example, on a car production line the seats will be delivered to the line the day they are needed.  This means the car manufacturer does not have to hold large stocks in a   outlet office warehouse shop , which reduces the costs of production.  The main disadvantage of this system is that if the van delivering the seats is late, this will hold up the production line and cost the company money.

Staff who work with suppliers to bond with them and get a close enough relationship to make   LIT JIT  HIT TIJ work will be working in a department called purchasing or procurement.  This relationship between the business and the supplier is important to keep   simplicity quality product accuracy  levels high.  For example, school canteens will want to procure the best possible fruit and vegetables to keep the students healthy.  This is a B2B, or business to business, relationship.  Other important factors of supplier relationships and procurement are the delivery cost and  rushtravelspeedvelocity, the   supply availability quality accessibility  of the goods and services, the costs, and the trust between the companies.

On the other hand, businesses may prefer to operate a Just In Case system which means  highbufferlowsmaller stock is held in case the existing stock is used up quicker than expected. This prevents the staff having to stop work whilst awaiting stock.