Purchasing Objectives: 3.- Develop Supply Base Management.

One of the most important objectives of the purchasing function is the selection, development, and maintenance of supply, a process that is sometimes described as supply base management. Purchasing must keep abreast of current conditions in supply markets to ensure that purchasing:

(1) selects suppliers that are competitive,

(2) identifies new suppliers that have the potential for excellent performance and develops closer relation ships with these suppliers,

(3) improves existing suppliers, and

(4) develops new suppliers that are not competitive.

In so doing, purchasing can select and manage a supply base capable of providing performance advantages in product cost, quality, technology, delivery, and new-product development. Supply base management requires that purchasing pursue better relationships with external suppliers and develop reliable, high-quality supply sources. This objective also requires that purchasing work directly with suppliers to improve existing capabilities and develop new capabilities. A good part of this text focuses on how purchasing can effectively meet this objective.


Source: Purchasing and Supply Chain Management. (Monczka, Handfield, Giunipero, Patterson)


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