Relationship between Supply department and Sales Department
Your sales department depends on your Supply department to have the inventory in place to fulfill completed sales. Your Supply department in turn depends on your sales department to allow enough lead time between the time an order is placed and the promised fulfillment date. Procurement staff can make this process easier clearly communicating how long it takes to obtain the items being sold. Sales staff can in turn make this process easier promising customers only what is comfortably possible for the procurement department. If you sell furniture and it takes two weeks to obtain the materials for a custom order, it’s counterproductive to promise a customer that your company will have an order ready in a week and a half.
Supply and Finance
The relationship between your Supply department and finance department requires ongoing feedback in both directions. Your Supply department needs to know about the possibilities and constraints that your finance department handles. These include new sources of capital that make it possible to make advantageous inventory purchases and cash flow difficulties that limit Supply power. In turn, your finance department needs to know when Supply and supply is working towards an upcoming expenditure such as a new piece of equipment or a shipment of stock to keep your sales department supplied. Although there may not be bountiful funds available, if there is an opportunity to buy a bulk amount of a key item at an advantageous price, it may be worthwhile for finance to get creative and find the money even if cash is tight. Similarly, your Supply department may opt to buy in smaller quantities or stagger orders to coordinate with your financing department’s timeline.
Supply and Production
Smooth and timely production depends of having needed parts on hand. Ordering these parts is the responsibility of the Supply department. In turn, manufacturing managers are responsible for communicating to Supply and supply staff about what they need, with enough lead time for Supply to procure without bringing production to a standstill. This effective communication depends on both Supply and manufacturing staff knowing how much time it takes to order and receive different parts, and also having clear and current information about which parts are most critical to have on hand and which can be ordered from multiple sources if there is an issue with your primary supplier. If your production can’t proceed without a specific type of glue that is only available from a single manufacturer, it’s especially important to avoid running out. Production must proactively inform Supply if you’re running low, and Supply must treat low inventory levels with appropriate urgency.
Inventory and Supply software can be indispensable for facilitating the flow of information between Supply and production. Not only will Supply automatically receive updates when parts and materials are used, but a system can be set up with built-in order points that correspond to the rhythm of each item’s usage, as well as its timeline for ordering and delivery.