FACTS AND INFORMATION
$20.41 trillion is a lot to purchase!
GDP is the total value of goods & services produced in a country in one year.
gross domestic product
FOR THE U.S.
Where Does Purchasing Occur in the Supply Chain?
Purchasing can be...
CENTRALIZED: purchasing controlled from one central location within an organization OR
DECENTRALIZED: purchasing controlled from different locations or divisional levels within an organization
GOODS: raw materials, semifinished goods, finished goods used to produce the organization’s final product, MRO supplies, and capital goods.
SERVICES: activities an organization needs but cannot or has decided not to complete itself
What Does an Organization Purchase?
TIGHT PROFIT MARGINS
Many industries have tight profit margins. Cost saving through PROCUREMENT practices is essential.
The net profit of the airline industry is 4.7%.
Supplier Selection Criteria
https://fred.stlouisfed.org/series/SLMNTO02USQ189S ($497 billion - Q2 2018)