The supply or provisioning is the set of activities that allows to identify and acquire the goods and services that an organization requires for its adequate and efficient operation, either from internal or external sources.
Within the supply process there are the following activities:
- Calculation of needs Purchase or acquisition Procurement Storage Dispatch or distribution Stock control Use of waste
Another definition expresses that supply is one of the stages of what is usually called the Supply Chain. In general terms, this concept encompasses business processes, people, organization, technology and physical infrastructure that allows the transformation of raw materials into products and services that are offered and distributed to users to satisfy their demand.
In particular, supply can be understood as the process carried out by an organization to obtain those goods and services that it requires for its operation and that are produced or provided by third parties. This concept implies incorporating in the definition of the process all those activities that are related to the purchase or contracting, from the detection of needs to the extinction of the useful life of the good or service.
The supply process can be divided into six stages:
- Definition of requirements Selection of the purchasing mechanism Calling and receiving bids Evaluation of bids Award and formalization Execution and management of the contract
One more says that sourcing is part of production logistics along with physical distribution, maintenance, and plant services. The general objective of the supply system is to provide the production function with the necessary materials and resources, in an adequate time and manner. The supply system comprises 3 sub-functions:
- Purchase managementReceptionStorage - Stock management
The supply cycle. Source: Boland and others
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References:
Public procurement and contracting system. Supply process, Ministry of Finance, Government of Chile, p. 3.
Boland, Lucrecia and Others. Administration functions, EdiUNS, 2007, p.127.
