unit 2 Purchasing and Vendor Management.pptx - Purchasing...

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Purchasing and VendorManagement
IntroductionPurchase is the procurement ofgoods or services from someexternal sources.Acquisition of some kind in lieu ofaccepted price on consideration inreturn.Purchasing is the procurement ofthematerials, supplies, machines,tools andoperation of amanufacturingplant.”---------- Alford &Beatty
Objectives of PurchasingTo acquire the goods or services atminimum cost.To ensure the continuous flow ofproduction.To develop the main and attenuatesources of supply.To ensure timely delivery.To make optimum utilization of capital.To acquire quality product so that qualityoutput is served to the consumer.
Types of PurchasingPurchase made as per requirement:Nopurchase is made in advance.Purchase is done as need arises.Method usually applied foremergencyrequirement orinfrequent goods.Contract Purchasing: Contract ofmaterial is given to an agency. Ithas anadvantage that low price ofthosematerials whose costfluctuates highly
Market Purchase: Purchase is madefrom the market to take advantageof price fluctuations.Schedule Purchasing: It is a cyclicpurchase model. A schedule ofpurchase is made and it is used forthose commodities whose price donot fluctuate.
Purchasing ProcedurePurchase Requisition: All thedepartments of the organization areasked to make a requisition forpurchase.Decision of Purchase: Collectingrequisition from variousdepartmentsand handed it toPurchase department /committeehead. Purchase head decidewhat topurchase and in what quantity.
Study of Market conditions: Markettrends are analysed to generate anidea of price and availability ofproduct.Selection of Vendors.Placing of Purchase order.Receiving of order.
Functions / Responsibilities ofPurchaseDepartmentObtaining pricesSelecting vendorsPlacing Purchase orderSettlement of complaintsMaking and maintaining harmoniousrelations with vendors.
Purchasing Management Processconsists usually of 3 stages:Purchasing PlanningPurchasing TrackingPurchasing Reporting
Purchasing PlanningPurchasing Planning may include steps asfollows:creating purchasing projects and tasksproviding related information (files, links,notes etc.)assigning purchasing tasks to employeessetting task priorities, start/finish datesetc.assigning supervisorssetting reminderscontrol and evaluation
Purchasing TrackingPurchasing Tracking consists of:Checking task's status and/orhistory of changesReceiving status notificationsSorting, grouping or filtering tasksby current statusHighlighting overdue tasks,
Purchasing ReportingPurchasing Reporting includes:Comparing actual and estimatedvaluesCalculating purchasing task andproject statisticsSorting, grouping or filtering tasksbyattributesCreating charts to visualize keystatistics and KPIs

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Term
Summer
Professor
N/A
Tags
centralized purchasing

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