Effective purchasing means getting what is required as cost-effectively as early as possible. Today’s business pressures had build organizations requirement to the need of cut costs, achieving in shorter lead-times, reducing stocks and increase flexibility of operations. Factors like long-term relationships, sustainability, market position and your organization’s capabilities came into account and so do planning and vendor rating tools. Purchased goods and services can effects 50 percent of total costs, so effective purchasing management can yield huge profits to the organization.
Effective purchasing means getting what you need as cost-effectively as possible. Many of today’s business burdens are, the need to cut costs, achieve shorter lead-times, reduce stocks and increase flexibility – affect purchasing. Factors like long-term relationships, sustainability, market position and your organisation’s capabilities come into account and so do planning- and vendor rating tools. Purchased goods and services can account for 50 percent of total costs, so effective purchasing management can yield huge benefits.
THE MAJOR OBJECTIVES OF PURCHASING ARE TO
- Value and quality of company’s product is to be retained
- Minimize cash tied-up in inventory
- Maintaining input and output flows
- Optimizing the area of the organization in the competitive environment
PURCHASING MAY ALSO INCLUDE
- Development and analysis of the product specifications,
- Receipt and alteration of requisitions,
- Advertising for bids,
- Assessment of bid,
- Award of supply contracts,
- Inspection of good received, and
- Their appropriate storage and release.
There is no single, simple formula for excellent purchasing. The commercial purchasing role is different from the call-off role; the role of purchasing investment projects differs from its role in bulk industry companies. Buying services vary from buying materials. Buying on spot markets has different dynamics from buying futures. Purchased goods and services can account for 50 percent of total costs, so effective purchasing management can yield high benefits.
What VJM & Associates Offers
VJM & Associates have knowledge of the purchasing role and the different characteristics and factors affecting a purchasing department. Our expertise and large experience in many industries and business processes will help you to advance your purchasing processes and organization.