(2 rânduri libere, 11p)


Studies and Scientific Researches. Economics Edition, No 22, 2015 http://sceco.ub.ro 

55 

 

 
A THEORETICAL APPROACH OF THE SUPPLY PROCESS  

 
Nicoleta Ciucescu  

“Vasile Alecsandri” University of Bacau 
 ciucnico@yahoo.com  

 
 
Abstract  
In a permanently changing economy, organizations need to achieve more goals with fewer 
resources in order to remain competitive. A key component in this effort is the design and 
coordination of distribution and supply networks. Each product has a particular distribution 
channel to the end customer, which is often long and complex. The supply process has an 
important contribution to achieving results of economic, industrial and productive 
organizations and has direct responsibilities related to reducing costs. This article aims to 
present some of general questions relating to the supply process, such as the definition, 
classification, stages and phase of the supply process using a comparative study of literature as 
a research method. The article also presents a variety of information that underlying the 
preparation of approved vendors list. 
 
Keywords  
customer; supply; resources; purchase; approved vendors 
 
JEL Classification  
M0  
 
 
 
Introduction 
To achieve this article the research method used is a comparative study of literature. 
The supply is one of the component activities of commercial function through which 
businesses fall in economic relations with other companies. 
The material resources supply is that activity through which it provides the necessary 
elements for work with a view to obtaining a higher profit for organizations. The 
supply is essential in any business organization, manufacturing or industrial, 
especially in situations where material resources have a high share in the cost of 
production, or when the range of the supplied articles is large or when the market for 
such products suffer fluctuations between demand and offer. 

 
1. Definition, classification and supply stages 
The supply is a very complex activity that involves a laborious decision-making 
process that defines any action that aims procurement of goods and services necessary 
for the production processes, service delivery and sale of goods to the population. 
The supply includes all activities carried out within the enterprise version to ensure all 
resources necessary to the optimum version of its activity. 
In organizing the chain of activities in economic organizations, industrial production 
or the supply of material resources, we can mention a few technical terms that define 
specific actions the supply process, such as: 

- the purchase is the phase of the supply process reflected in a monetary 
transaction which falls between prelude (which include the following: 
identification of the necessary material resources and setting of deadlines 



A THEORETICAL APPROACH OF THE SUPPLY PROCESS  

56 

 

and quantities purchased) and the following actions (which include the 
following: negotiating the supply and material resources to effectively in the 
enterprise). 

- the purchase is phase of supply process in which the transfer of ownership 
of material resources from supplier to customer, using payment instruments. 

-supply, which constitutes the final action of the supply process with material 
resources, through which the shift towards consumption of material resources 
purchased from the supplier; basic actions that make up the supply activity are: the 
issuance of deposits required quantities of material resources; working with power 
points amounts and schedule. 
Depending on the activities to be carried supplies and material resources to the nature 
of these resources or services necessary industrial enterprise, the following types of 
supply main activity: 

- supply production base, which deals with procurement of all types of 
material resources needed to conduct the current business of the undertaking, 
namely: raw materials, components, sub-assemblies, parts, measuring 
instruments and control collaboration for the execution of components or 
technological operations, electricity, fuel and lubricants and packaging, 
consumables etc.; 

- the supply for investment, which relates to procurement of equipment 
necessary for physical development in accordance with the investment 
objectives of enterprise development strategy; 

- collaboration for supplied delivery material resources transport, if 
providers do not provide this service, or delivery of finished products to 
customers; 

- technical cooperation for the realization of benefits, intellectual or 
otherwise, as: maintenance, logistical benefits, computer programming, 
market research, surveillance and security, etc. 

Dumitru M. (2005) presents a range of influences and circumstances on which they 
perform upon organization supplies: 
- generate administration costs involved salary; 
- requires financial resources to obtain materials, components, equipment and services; 
- add value to the product by value analysis, negotiation and supply strategy; 
- generate revenue by selling surplus material, in counterpart arrangements or sales - 
leaseback type; 
- has the authority to decide on the determinants of profit; 
- has its own budget; 
- reducing costs is a proper performance evaluation criterion. 
Supply process consists of several stages. These stages are: 

- establish what needs must be met and the products to be purchased; 
- searching and selecting the suppliers that will allow meeting the needs 

expressed; 
- purchase constitutes the third stage, depicting the result of her 

confrontation between supplier and buyer. 
- the last stage is the one that refers to the period after making the purchase 

action. 
Presentation stages of the supply process and the content phase shown in table no.1. 

 
 
 
 



Ciucescu 

57 

 

 
 

Table no.1 
The main stages of the supply process for production material resources 

Source: Brabie Gheorghe (2001), Logistică industrială, Editura Junimea, Iași, pp.50 
 
 

2. Objectives and supply specific activities 
The main objective of supply (Stan, A. 2012) is focused on providing complete, 
comprehensive and timely economic unit with the appropriate technical resources 
quality materials and equipment in place and deadlines. To achieve this objective 
more specific activities are carried out such as: 
- Identifying and fixing the amount and structure of materials and energy for the 
design parameters of activity of the organization. This is done by studying and 
collecting information on energy and material resources needed for all consumer 
destinations throughout range, layout and quality. 
- Technical and economic substantiation of the plan and the programmes for the 
supply of material and energy. For this purpose shall be used and the manufacturing 
plan, the rules for the whole structure of manufacturing needs for other destinations of 
use of material resources, the structure and level of existing stocks, own resources 
during the period covered by the foundation.  

Step Stage name 
 
Content phase 
 

Step 1 
Information on 
material resources 
and suppliers 

Collecting preliminary information on material 
resources and suppliers. Suppliers interested 
potential customers to provide all required 

Step 2 Launch of the order 
 

The staff in charge of the buying process 
launching Purchase Order requesting the 
required material resource. 
 

Step 3 

Registration order 
to the supplier and 
the shipment of 
goods 
 

Supplier achieved record order and sending 
material resources required quantity and at the 
agreed term 
 

Step 4 Invoice payment 
 

On delivery of materials / goods provider sends 
the customer invoice, containing the following 
data: quantity delivered, payment due date and 
amount. 
 

Step 5 
Recording material 
resources 
 

Goods received from the supplier is registered 
and added to the existing stock. 

Step 6 
The invoice 
verification 
 

Invoice received is checked from the point of 
view of the correspondence between the quantity 
of materials/products entered into it and actually 
received. 

Step 7 Invoice payment 
 

On the basis of verified payment invoice by the 
supplier. 



A THEORETICAL APPROACH OF THE SUPPLY PROCESS  

58 

 

- Sizing based technical documentation - economic consumption and energetic 
resource materials- work provides the technical elements for calculating energy and 
material needs and is focused on the elaboration of specific consumption norms 
analytical, technical and economic grounded: by using these technical regulations 
consumer prevents irrational consumption, waste of materials and energy and thus 
unduly increasing economic costs. 
- Develop material and energy balances which help to highlight how the use of 
resources, as well as tracing their concrete form during processing. Base is the 
foundation of these instruments manufacturing programs and rules specific 
consumption estimated in the technical and economic documentation for the 
execution of the products, works or services. 
- Sizing on economic grounds and stocks lots of material resources for command and 
supply; the action is complex in nature, being justified by the importance of its 
economic aspect that is highlighted not only by the amount of material resources but 
also by spending it generates whose weight is 25-30% over the average value of 
stocks.  
This action it shall be attached to the establishment of quantitative levels or timing 
calendar of supply orders. 
- The domestic and foreign market exploration of resources and materials for energy 
and real sources and potential location to be used. The action involves the issuance 
of invitations to tender, investigations at fairs and exhibitions, international and 
domestic commodities exchanges, studying commercial catalogues, leaflets, flyers, 
other sources of information and publicity, commercial representations, dialing units 
specializing in the commercialization of products and materials, the collection and use 
of reusable materials. 
- The choice of material resources and technical equipment that meet the best 
characteristics for consumer applications, presents the best delivery conditions etc. 
- Choosing suppliers whose offer presents the best economic conditions and ensure 
certainty in future deliveries on short or long term. The choice of sources of supply 
will be made after several criteria including significant are those who are considering 
the quality of resource materials, terms, the distance of transmission, the possible 
form of transport used, the price level, potential suppliers, distribution channels used, 
etc. 
- Elaboration of strategies in the purchase of resources in relation to the market of 
internal and external supply. The action is carried out after prior analysis of the 
characteristics of market supply, suppliers, of influencing the purchasing strategy. 
- Testing the reliability of suppliers you select in order to highlight moral uprightness, 
guarantees enjoyed by business, the seriousness in complying with obligations and 
solvency. 
- Fleshing out relations with suppliers chosen, action involving the establishment, 
through the agreement, all conditions will delivery between partners. Completion of 
your purchase is done by issuing orders and conclusion of commercial contracts. 
-Stock tracking of contracts of insurance material, preparation of charts tracking stock 
supplies suppliers and resources. 
- Ensure normal conditions reception lots of incoming materials suppliers; this 
involves setting up special discharge spaces - reception rooms appropriate technical 
means, to set up commissions reception - Reception and organization of work; their 
formations of workers for conducting these operations . 
- Securing storage spaces, equipping them with adequate furniture, internal 
organization of traffic flows, choosing efficient storage systems, storage operations-
setting of material resources in the storerooms and warehouses; in the same vein is 



Ciucescu 

59 

 

the inclusion of views of the resource entries received and accepted, so the conditions 
of storage and conservation required by the nature of the material stored and theft 
prevention, fire safety. 
- Organize system serving rhythmic material resources consumption subunits of the 
organization consistent with manufacturing programs; In this framework shall ensure 
the development of programs optimal movement consumption correlation moments of 
liberation transmission of material from deposits subunits consumer ones that are 
actually necessary, staggering judicious in time of serving to prevent expectations, the 
overcrowding service points, blocking internal transport, loading irregular workers in 
warehouses. 
- A systematic check of the actual evolution of stocks in relation to limits to avoid 
adverse economic consequences that it may cause overstocks or lack of materials in 
stock on economic activity of the enterprise, its financial situation. 
- Monitoring and control of materials and energy resource consumption destinations. 
This activity aims to prevent consumption beyond the limits set by calculation 
wastage during transport and storage of non-compliance with technological discipline 
or original destination of use of material resources. 

 
 

3. The approved vendors list 
In order to establish this list needed some information which can be grouped into 
several categories. The first category refers to data provider identification (name, 
address, Telephone/Fax:) 
Another category is the nature of the provider's activity, services or products 
concerned and also their detailed specification. 
As regards the evaluation criteria, they may cover: 
a) certiffied company management systems:  
* ISO 9001 : 2008; 
* ISO 14001 : 2005; 
* OHSAS 18001: 2008; 
b) CE certification for products supplied: 
* all products are certified; 
* 50 % of products are certified supplied; 
* certification pending; 
c) an independent department of technical control / inspection products; 
d) how to monitor the quality of raw materials and/or sub-assemblies they purchase, 
namely: 
* control of documents attesting; 
* check at reception; 
* third party inspection. 
e) verifying the quality of finished products before shipment to beneficiaries; 
f) a system of evaluating their suppliers; 
g) the existence of a procedure for handling non-conformities; 
h) handling of complaints regarding the quality of products: 
* product remediation;  
* replacement product;  
* amount paid for the product return. 
i) specification complaint deadline:  
* 24 hours;  
* 48 hours;  
* more. 



A THEORETICAL APPROACH OF THE SUPPLY PROCESS  

60 

 

k) specification of the term / payment terms agreed: delivery, 30 days, 60 days; other 
l) specification agreed payment methods:  
* cash;  
* payment order;  
* CEC;  
* promissory note; 
m) a minimal amount / orders; 
n) to customers specifying your traditional facilities:  
* discounts;  
* priority delivery;  
* free shipping;  
* payment term; 
o) technical documentation accompanying your products provided:  
* yes;  
* no;  
* on demand; 
p) accompanying documentation as required by law provided your products: 
* yes;  
* no;  
* on demand; 
q ) providing post sales collateral for supplies? Yes; No 
r) deadline for providing product specification order:  
* 24 hours;  
* 5-7 days;  
* 15-30 days;  
* > 30 days; 
s) ensuring the supply of the product ordered at your destination:  
* yes;  
* no;  
* on demand. 
Before launching a contract when the need arises procurement is established the 
necessary raw materials, materials, equipment to be purchased and the services or 
works to be subcontracted. 
The supply of raw materials, components, equipment, machinery and subcontracting 
activities or services - necessary for the performance of contracts, must be made 
known recording of supply, which includes at least the following: 

- identification of products, services or works to be supplied/sub; 
- deadlines for the completion of works supply or subcontractors; 
- potential subcontractors; 
- quality requirements for products, services, contracted work; 
- conditions required for subcontractors; 
- the applicable editions of the specifications and drawings (if deemed 

necessary). 
 
 
Conclusions 
The conclusions of this article will be focused on the following areas: 

- Highlighting the essential aspects of the procurement process; 
- Summary of key information for a proper development of the supply 

process; 



Ciucescu 

61 

 

- Mention of issues concerning of purchased product 
verification for optimal completion of the supply process. 

Regarding the procurement process can be summarized as following: 
- the organization must ensure that purchased product conforms to specified 

purchase requirements and that the product supplied complies with the 
requirements specified supply. 

- type and extent of control applied to the supplier and purchased product 
must depend on the effect of purchased product on subsequent product 
realization or the final product; 

- the organization must evaluate and select suppliers geared their ability to 
supply product in accordance with the requirements of the organization; 

- it is appropriate to establish criteria for selection, assessment and 
reassessment . 
- must maintain records of the results of evaluations and any necessary 
actions arising from the evaluation. 

Also, in the interests of good conduct of the process it is necessary to supply the 
following details of the outcome of the procurement information: 
- information should describe the product for supply of stocked including, where 
appropriate, requirements for approval of product, procedures, processes and 
equipment. 
- information should describe the product for supply of stocked including, where 
appropriate, requirements for staff qualifications. 
- information should describe the product for supply of stocked including, where 
appropriate, requirements for quality management system . 
- the organization must ensure that the specified requirements are adequate supply 
before communicating them to the supplier. 
For an optimal completion of the procurement process must be given two points that 
refer purchased product verification, including: 
- the organization must establish and implement the inspection or other activities 
necessary to ensure that the product supplied meets the requirements specified supply. 
-when the organization or its customer intends to perform verification at the supplier, 
the organization should specify the information to supply arrangements envisaged 
verification and method of product release. 

 
 

References 
Bălan, C. (2006), Logistica: parte integrantă a lanţului de aprovizionare - livrare, 

Bucureşti, Editura Uranus 
Brabie, Gh. (2001), Logistică industrială, Iași, Editura Junimea 
Dumitru, M. (2005), Managementul logisticii. Elemente teoretice şi practice, Craiova, 

Editura SITECH 
Gattorna, J., L. (1999), Managementul logisticii şi distribuţiei, Bucureşti, Editura 

Teora 
Ilieș, L., Logistica- sursă de competitivitate, Management & marketing, pp.93-

102, available at http://www.managementmarketing.ro/pdf/articole/8.pdf 
Patriche, I. (2008), Managementul tranzacţiilor comerciale, negocierilor, 

contractărilor şi achiziţiilor publice, Bucureşti, Editura Universitară 
Popa, V. (2004), Strategii manageriale interorganizaţionale, Târgovişte, Editura 

Bibliotheca 
Stan, A. (2012), Logistica mărfurilor, Bacău, Editura Alma Mater. 


	A THEORETICAL APPROACH OF THE SUPPLY PROCESS
	Nicoleta Ciucescu
	“Vasile Alecsandri” University of Bacau
	ciucnico@yahoo.com
	Abstract
	Keywords
	JEL Classification
	M0
	Introduction
	1. Definition, classification and supply stages
	2. Objectives and supply specific activities
	3. The approved vendors list
	Conclusions
	References
	Brabie, Gh. (2001), Logistică industrială, Iași, Editura Junimea