Purchase Management (Purchasing)
o It means the purchase of proper materials, machinery, equipment, and supplies for stores used in the manufacture of a product adopted to marketing in the proper quality and quantity at the proper time and the lowest price, consistent with the quality desired.
Nature of Purchasing
o Commodity analysis.
o Market research.
o Purchase order Tracking and Follow Up.
o Transmitting Forecasts of future needs to suppliers.
o Supplier Performance Measurement.
o Management of supplier quality.
o Contract Management and Negotiation.
o Management of Inbound /outbound Transportation.
o Price/cost Analysis
Types of Purchases
o Raw materials.
o Semi-Finished Products and Components.
o Finished Products.
o Maintenance, Repair and operating items.
o Production support items.
o Services.
o Capital Equipment
Objectives of Purchasing.
o To minimize the costs.
o Ensure continuous flow of Production.
o Increase asset turnover.
o Develop alternate sources of supply.
o Good relations with suppliers.
o Achieve integration with other departments.
o Train and develop the personnel.
o Efficient record keeping and management reporting
Purchasing Procedure
o Receipt of Purchase Requisition.
o Potential sources of supply.
o Issue of Letters inviting quotations.
o Receipt and analysis of quotations.
o Selection of vendor.
o Purchase order.
o Follow up and delivery.
o Analysis of Receiving Reports.
o Scrutiny and approval of invoices.
Functions of Purchasing
o Procuring materials.
o Evaluating Price.
o Paperwork and Accounting.
o Policy compliance
Purchasing Methods
o Purchasing by requirements.
o Purchasing for specified Period.
o Market Purchasing.
o Speculative Purchasing.
o Contract Purchasing.
o Group Purchasing.
o Purchasing through Directorate General of Supplies and Disposal.
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