Supply Chain Management and Purchasing Principles notes – KNEC Diploma


This unit or subject is examined by KNEC on those taking the following courses:

The topics that need to be covered as required by KNEC in this unit/subject are as follows:
This module unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her perform purchasing and distribution functions effectively.
General Objectives
By the end of the module unit, the trainee should be able to:

  • Discuss the importance of the Supply Chain Management an organization
  • Explain the elements of Supply Chain Management in an organization
  • Outline the procedure of sourcing for materials and ordering materials
  • Describe the activities involved in the process of receiving and inspecting incoming materials
  • Explain the procedure followed in the payment of suppliers
  • Outline the role of physical distribution in purchasing materials for an organisation

Module Unit Summary

Topic 1: Supply Chain Management and Purchasing Function

  • Introduction to supply chain management
  • Internal and External supply chains
  • Elements (Scope) of Supply chain management
  • Supply chain management decisions
  • Meaning of purchasing
  • Importance of purchasing function
  • Objectives of the purchasing department
  • Relationships between purchasing department and production department
  • Internal Organisation of purchasing department

Topic 2: Quality and Quantity Determination

  • Meaning of quality and quantity
  • Factors to be considered in determining quality of materials
  • Purpose of specifying materials
  • Features of a good specification
  • Methods of materials specification
  • Factors in determining quantity of materials to buy
  • Methods used in determining quantity to buy

Topic 3: Determination of Price and Right Time to Buy

  • Meaning of price and time
  • Importance of determining price of materials
  • Factors influencing prices of materials
  • Methods of pricing materials
  • Factors in determining right time to buy
  • Distinction between lead time and delivery time.

Topic 4: Sourcing

  • Meaning of sourcing
  • Factors considered in determining sources of supply
  • Sources of information about potential suppliers
  • Types of sources of supply
  • Methods of sourcing
  • Documents used in sourcing
  • Criteria for evaluating potential suppliers

Topic 5: Ordering Procedure

  • Importance of following the purchasing procedure
  • Purchasing/ordering procedure
  • Documents involved in ordering/purchasing procedure
  • Types of orders

Topic 6: Receiving and Inspection of Goods and Services

  • Meaning of receiving and inspection
  • Factors considered during receiving and inspection
  • Importance of inspecting incoming goods
  • Methods used to inspect incoming goods
  • Documents used in receipt and inspection process
  • Options of treating rejected goods

Topic 7: Payment Procedure

  • Meaning of payment
  • Factors considered in processing payment claims for suppliers
  • Documents used in payment process
  • Methods of payment
  • Commitment register

Topic 8: Physical Distribution

  • Meaning of physical distribution
  • Components of physical distribution
  • Importance of physical distribution
  • Factors considered in selecting transportation mode
  • Documents used to facilitate transportation of goods

Topic 9: Emerging Issues and Trends in supply chain management and purchasing principles

  • Emerging issues and trends
  • Challenges posed by emerging issues and trends
  • Coping with challenges posed by emerging issues and trends

0 Replies to “Supply Chain Management and Purchasing Principles notes – KNEC Diploma”

Leave a Reply

Your email address will not be published. Required fields are marked *