The procurement function involves the processes and activities related to acquiring goods and services for an organization. This includes identifying needs, sourcing suppliers, negotiating contracts, purchasing items, and managing supplier relationships. Effective procurement aims to ensure cost efficiency, quality, and timely delivery, while also supporting sustainability and compliance with regulations. Ultimately, it plays a crucial role in optimizing an organization's supply chain and overall operational efficiency.
Rack and Long's strategic positioning tool can be used for identifying the strategic level which a firm is in. Four levels are identified.Passive- Purchasing is viewed as a clerical function and acts on requests from other departments.Independent- takes a more professional approach to purchasing including enhanced IT and communication technologiesSupportive-Purchasing is viewed as corporately essential and provides timely information on prices and availabilityIntegrative- Purchasing is integral to corporate strategy and management involve in strategy development.
The common objectives of purchasing purchasing can be outlined as follows:· Maintaining continuity of supply: The purchasing function must ensure the continuous availability of material, supplies and equipments to maintain production schedule or to avoid disruption in production. The purchasing function also requires investments in reserve inventories. The efficiency of purchasing function lies in proper balancing of these factors which require experience, judgment of future activities and trends and various other activities on the part of purchasing authority.· Maintenance standards quality: The purchasing function must ensure that the material purchased must be of required quality in order to produce the goods according to specifications and to maintain quality standards.· Avoidance of duplication, waste and obsolescence: The purchasing authority must have the accurate knowledge of the items in hand and the requirements of materials for a particular period in order to have proper decision in view of long range and short range plans. This is necessary to avoid duplication, waste and obsolescence with respect to various items purchased.· Maintenance of company's competitive position: The purchasing authority must constantly examine his specifications for the purchase of right material. This is necessary to make sure that his company's quality standards are neither higher nor lower than those of close competitors and to maintain his company's position in the industry.· Maintenance of company's good image: The purchasing agent must create a good image in the minds of suppliers. This will help him in purchasing operation and to discover new ideas and materials besides lowering its cost or improving products.· Developing alternative sources of supply: Alternative sources of supply should be exposed for increasing the bargaining power of the buyer and minimizing the cost of purchases. Purchases can be made from alternative sources if a particular supplier fails to supply the required items.
what are the aims and objective of WHSmiths
what is jd aims
the organisational issues of the purchasing function focus on the purchasing function of an organisation in a decentralisation or centralise manner.
what is the importance of purchasing
hospitle
explain the functions of the purchasing department
Cooperative purchasing organizations are firms that specialize in the purchasing function and provide this service to small businesses.
It saves money (expenditures).
To obtain lower prices for members
Purchasing a product/service
Psychology is the study of the human mind and human behavior. It aims to help society function better and sometimes it aims to help individuals function better. Psychology has been studied since ancient times in China, Greece, Egypt, and India.
evens the supply of goods and reduce price fluctuations.
The power of the purchasing department is greatly influenced by the success of the accounts department. Without accounts to produce revenue, the resources needed for the function of the purchasing simply do not exist. In simpler terms: No money=No purchases.
To give small businesses (acting together) the volume purchasing power (negotiating position) to compete with larger businesses in their industry.