What are procured products in supply chain management


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What are procured products in supply chain management
In supply chain management, procured products are items that a company buys from suppliers in order to make their final products. Think of it like going to the store to buy ingredients for a recipe – the ingredients are the procured products that you need to make the dish. For example, a company that makes smartphones needs to procure components like screens, batteries, and processors from different suppliers in order to assemble the final product. Without these procured products, the company wouldn’t be able to make their smartphones. According to a study by the Institute for Supply Management, about 60-70% of a company’s total costs are related to procured products. This shows how important it is for companies to manage their procurement process effectively in order to control costs and maintain quality. In simpler terms, procured products are like the building blocks that companies need to create their final products. Just like how you need different ingredients to make a delicious meal, companies need to procure different products from suppliers to make their products.