Procurement Logistics: definition and examples
Procurement logistics is a subarea of logistics. It describes the process from the purchase of goods like raw materials to their transport to the receiving store or the production line. In the overall logistics process the procurement logistics are located between the outbound logistics of the supplier and the manufacturing logistics of a manufacturer.
Tasks of Procurement Logistics
Procurement logistics are subject to the highest business objective of a company like keeping it competitive and profitable. It is their responsibility to keep the supplies coming
- in the correct amount
- at the right time
- in good quality
Only then a smooth production process is warranted, which is the basis for business objectives like profitability and competitiveness.
Goals of Procurement Logistics
To reach the business objectives, procurement logistics define their own goals that are subordinate to the business objectives and are contributing to them:
- favourable purchase prices
- high product quality
- flexible delivery
- security of supply
- low feed costs
- low storage costs
- low inventory
Procurement logistics are a highly complex subdivision of logistics, because you have to take into account many variables. The staff must be highly qualified, must have great knowledge of the markets and always have to be up to date on current developments.
Always have a Plan B
Because not everything can be planned perfectly and something can go wrong at any time or doesn’t work as planned, an procurement logistics manager always has the plan B ready. The time:matters On Board Couriers are one possibility if a spare part is urgently needed or a shipment is cancelled, so that a production standstill is avoided.