Familiarity and an understanding of purchasing terms are as important as understanding the whole purchase order and receipt system. It saves you and your company time, aggravation and money. Those new to the industry would do well to learn some terms used by the vendors in the course of delivering their products and services.

Question: What is the difference between a bill of lading and a packing slip?

Answer: A bill of lading is a contract between the shipper/owner/seller of the goods (e.g., a manufacturer) transported and the transportation provider. The transportation provider generally initiates the bill of lading.

A packing slip is a document enclosed with the boxes being shipped that the receiver of the goods uses to verify that the shipment is complete. A packing slip is generally initiated by the shipper/owner/seller of the goods.

Question: I would like to know where the supply chain manager’s position in a typical organizational structure should be located and at what level. I also would like to know who should report to such a position.

Answer: First, I suggest that you read this blog post: To Whom Should Purchasing Report?

In “What Is Supply Chain Management, Anyway?” someone who manages the supply chain is responsible for acquiring materials, converting those materials into finished goods, and the outbound distribution and transportation of those finished goods.

Therefore, groups like purchasing and inventory management, warehouse, production, logistics, and shipping would report to a supply chain manager. Thus, the supply chain manager (or VP of the supply chain) should be at the second tier of the organizational structure, under the president and on the same level as the CFO, General Counsel, etc.

I will caution you that, because the term “supply chain management” is used in various ways at various companies – some companies call their purchasing departments Supply Chain Management even though they are responsible only for inputs, not conversion nor outputs – there isn’t a true typical organizational structure.

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Published On: April 4th, 2021Comments Off on Purchasing Training Tidbits
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