What are supply chain and procurement?

Supply chain is a massive umbrella that comprises an end-to-end flow of materials, information, people, resources, technology, and activities that contribute to the creation and sale of a product or service. Everything from the procurement of raw materials to the manufacturing and distribution of a product falls within the network of a supply chain.

The key elements of a supply chain are forecasting, planning, sourcing (procurement plays a vital role), manufacturing/production, logistics/delivery, and returns management. The primary purpose of a supply chain is to optimize the entire network, maximizing output and customer value while achieving a competitive advantage.

Procurement is a core component of the supply chain that helps ensure its integrity by providing the right inputs at the right time, price, and quantity within budget. Procurement is actually a buying part of the supply chain, which is a highly strategic and value-driven process, albeit with a transactional nature.