ISCOM/305 Week 4 Discussion question 1

According to our text, procurement is the relationship between a company and a supplier by the use of linkages, or information flow. This includes communications between the two about product demand, costs, quality, etc. Distribution applies for channels, processes, and functions including warehousing and transportation (Russel & Taylor, 2011). There are many reasons why a company would use Global Supply Chains. Some companies have relationships with suppliers in other countries because that country may only have the means of creating raw materials. The text gave an example for the Hershey’s company receiving their supplies from different areas of the globe because the cacao plants can only grow in specific climates. Another example can be cars. Some cars sold here in the United States are made in other countries and are sold for a premium. Communications between companies are important because they must work together to meet customer demands while working on costs and how these products will be distributed. Other factors include the timely arrival of these products. Customer needs are what drives a company to provide quality service and products, so companies would most likely opt to consider an outsourcing business with other companies to better handle costs and create quality materials.