Managing an internal supply chain

This article describes the supply management process in an internal network, a distribution network consisting of stores from the same company or a group of partners.

A- The supply chain

The supply chain consists of a set of entities and processes whose purpose is to ensure optimal circulation of products, respecting all the quality requirements, deadlines and costs requested by the consumer.

The internal supply chain is in a sense a store network of a company in which some supply the others successively and in a logic of supplier / customer.

The management of a supply chain consists in planning the circulation of products to ensure the coverage of the needs of each store, on time and in sufficient quantity. This work requires the implementation of strategies to avoid stockouts, bottlenecks, additional costs due to high inventory levels or poor transportation organization between supplier and customer stores.

B- Analysis of the internal procurement process

Internal procurement is usually initiated by a customer store that issues a predefined quantity and nature requirement. This is the internal supply request.

  1. The internal procurement request (DAI)

It is a paper or computer document in which are listed the needs of a customer store. It specifies, among other things, the nature and the quantities, the supplier stores, the desired delivery dates. Depending on the software used, it can specify the information relating to the storage of these products (store, location …)


In current management, they can be sorted according to different criteria:

  • DAI by customer store “pending receipt”,
  • DAI per customer shop “sold”,
  • DAI by supplier store “pending delivery”,
  • DAI by supplier store “delivery”,


The request for internal procurement can also take the form of a list of consolidated requirements from different stores or different areas. It is the proof of the order form. But some software developers have introduced an intermediate step in which any supply request is systematically converted into a purchase order before it is sent to a supplier store. These are called transfer orders.

  1. The transfer order

Unlike a purchase requisition, the internal sourcing request is not subject to a supplier consultation by tender. It is not subject to any price comparison. Moreover, it is a notion that has no place because it is just a transfer order of a quantity of product store to store. The only determining factors are the nature of the products, the quantities, the means of transport to be deployed and the deadlines to be respected.

The transfer command comes from a computer module for evaluating the different needs and CAD (Computer Assisted Control). The latter highlights the following operations:

Sort needs according to supplier stores

Creation of pick lists by store and for quantities available in stock,

Automatic creation of purchase requisitions for quantities not available in stock.


Automatic purchase requisitions will then be subject to an external purchase order. Once this order is delivered, the CAD application will automatically reactivate the pick lists to the respective vendor stores to satisfy previously unresolved requirements.

  1. The pick list

Collection lists are the documents used by the warehousekeeper for the preparation and delivery of transfer orders. They are the expression of the needs emitted by the requesting stores originally in the form of a transfer request. In addition to the information on the storage data (store, location, quantities, etc.), the pick lists also provide information on the destination of each item in the list (requesting warehouse).


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