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Supply Chain Terminology

Written by: Ian Marshall
Published on: 21 Dec 2014

Buyer

One who buys. Usually in charge of a product or range of products and with objectives of saving money by buying at lower prices so is therefore responsible for finding new suppliers at better prices/ quality/shorter lead times and also ensuring they perform. Typically in a serious company the buyer employed would be knowledgeable in the products he is expected to buy and be educated enough to operate at senior level with big suppliers at MD level etc.

Supply Chain Manager

Typically someone with the responsibility of getting the product in whatever state (i.e. could be finished goods or raw materials) and having the responsibility of moving the product from goods inwards to shipping and all the operations needed in-between (i.e. inside the chain of supply) and finally getting it to the end customer. The Supply Chain Manager could have responsibility for purchasing or not (depending how big a company it is)

Procurement / Purchasing Manager

Purchasing Manager would be responsible for at least an area of purchasing and maybe one of many with such a title in a large company. Usually these days he would be responsible for setting up contracts, finding the right suppliers for the products he is buying but not necessarily involved in following up orders for ensuring they are delivered in a timely manner. This would be left to the Procurement Manager and his team who are responsible only for ensuring deliveries come in as requested. It would be unusual to have one person with both responsibilities. However Procurement is a USA term and can be used for either Purchasing or Procurement functions.

Category Manager

This role is typically used in the service industry (banks/ insurance companies etc) where a category is a simple item of demand. For example someone could be responsible for the procurement of all company cars/ IT equipment/ telecoms/transport, each one of these items being a "category". In overall control could be a Services Manager or inside a manufacturing business a Non-Production Purchasing Manager (also known as NPP Manager), normally responsible to an overall Purchasing Manager or Director.

Contracts Manager

A person responsible for a specific contract or a range of contracts and would be typically found in for example the construction industry where one person with this title would be responsible for delivering a specific contract, say a large building or a bridge etc or in a business making large pieces of equipment and handling one specific large order or range of products and staying in touch with it till completion and customer satisfaction.

Procurement Manager

A person responsible for obtaining (or buying) a product or range of products via electronically communicated needs and setting up the means to do this. This could be done by letting it be known to an industry that you were about to set up a reverse auction at a given date and time online at whatever electronic address and the sellers putting in bids for the business. In this case the lowest priced provider wins the business, hence the term "reverse auction". The auction would be open for maybe 30 mins and bids would come in slowly with all the action in the last 2 minutes. You can see the value of each offer but not know who the competitor is.

Inventory Manager

Normally this person would have the responsibility of controlling the value/level of inventory (also known as stock) within certain parameter financial values and ensuring obsolescence was avoided. Typically in a large factory or business with large/wide product ranges and the need to manage it closely.

Logistics Manager

It can be difficult to differentiate between Supply Chain Manager and Logistics Manager in job titles these days. The word logistics derives from a French word which was used mainly for the supply and movement of troops and equipment to the right place. But basically it is ensuring that A gets moved to B on time every time without any problems.

Materials Manager

This was a USA job title evolved in the late 60's/ early 70's when Purchasing in large companies had to improve for efficient use of resources (i.e. inventory control was not good, nor was on-time delivery) so a new position of Materials Manager was created and it was hoped would bring together the challenges of getting the right product in place at the right time and the right price with the hope of having reduced inventories. Unfortunately there was no magic dust or wands to wave and it took a number of years before the idea worked. It needed better computerised systems before any success was made but it did improve the process eventually and is quite normal these days where he may or may not have control of purchasing but usually not in large businesses. So basically a man not in purchasing who is responsible for ensuring the supply of products/ materials to the right place on time. Bit like the Procurement Manager... who came along 20 years later.

Demand Planner

This could be someone inside a business who is responsible for managing the level of demand of certain products or services, often vital or scarce products (for example electricity or gas/ other fuel) where it could be very important to ensure correct levels of availability of an item is readily available or expected to be at a given time. It could also be a physical product of vital need.