IAF 716 Purchasing & Subcontracting 12-00-52

IAF 716 Purchasing & Subcontracting 12-00-52 -...

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Purchasing and Subcontracting Dr. Rama Srivastava Office: C4016 e: rama.srivastava@senecac.on.ca
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Purchasing Vs Subcontracting Purchasing refers to a business or organization attempting to acquire goods or services to accomplish the goals of the enterprise. Subcontracting refers to hiring a third party by a Company to perform a specific task as part of the overall project. Outsourcing is subcontracting a process.
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Purchasing represents a significant part of a company’s business. Food Firms (Nestle), Appliances manufacturers (Whirlpool) & Automobile making companies (GM, Toyota) report that between 60-80% of their manufacturing cost are for ‘purchasing materials ’. Jose Lopez, former Head of Purchase at GM, before he defected to Volkswagen in 1993, reportedly saved the company an estimated $1 billion on purchased material.
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Barriers to International Purchasing Language Culture Custom Duty Quotas Specifications and norms Local laws Political risks
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Organization of purchasing departments Centralized purchasing - Buying in large quantities so more attractive prices
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IAF 716 Purchasing & Subcontracting 12-00-52 -...

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