6 purchasing is the main factor in timely execution

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6) Purchasing is the main factor in timely execution of industrial projects. 7) Materials management organizations that exist now have evolved out of purchasing departments. 8) The steam of salesmen and direct mail advertisement entering the purchasing department day-in and day-out brings information about new products materials and new ways of doing old jobs. 9) Other factors like ( i ) post-war shortages, ( ii ) cyclical swings of surpluses and shortages and the fast rising materials costs, ( iii ) heavy competition, and ( iv ) Growing world-wide markets have contributed to the importance of purchasing. 17.4.5 PURCHASING POLICIES When a company decides to buy a part from outside suppliers, it is usually sub-contracted. In most cases, the sub-contractor is an ancillary unit. Sub- contracting is the work of obtaining the prime manufacturer’s requirements, mostly of fabricated parts and components, from outside sources in order to manufacture a certain product in the prime manufacturer’s plant. Sub -contracting is being practiced to a much greater degree now than in the past. One of the reasons is the policy of the Central Government to encourage ancillary industries in our country. All public sector undertakings of the Government of India have been given a directive whereby they are required ‘to identify and earmark particular lines of production and items of manufacture’ which could be off -loaded to ancillary industries. In fact, the directive goes to say that entrepreneurs should be given all facilities for setting up such ancillary units and other facilities including land, electric power, water and other services, and the necessary know-how and managerial guidance. The following extracts from the policy circular will give an idea of what is involved in such ancillary development. The public sector enterprises must take the responsibility for providing technical know-how and managerial guidance on:
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220 a) Production process/method, equipment selection and layout. b) Production aids like design, detailed manufacturing drawing, tooling, jigs and quality control procedures and equipment. c) Manpower planning. d) Organization and procedure for production planning, progressing and control. e) Management aids like cost-accounting, industrial engineering, product diversification and marketing. f) Sources of financing and procedure for obtaining them. In addition, the public sector enterprises should assume responsibility for providing: a) Imported raw material and components, scarce/critical indigenous raw material and drawings. b) Tooling, jigs and fixtures to the extent that these are outside the capability of ancillary unit. c) Process quality control equipment and training facilities for the development of supervisory and artisan skills.
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