Functions of purchasing management
The main objective of a company’s purchasing management is to supply the goods and services that the company needs, making sure to acquire the quantity, quality and price necessary for a given period of time.
The purchasing department is responsible for deciding what the company should buy from, from which supplier, how much,…
As we have said, it is not the same to assess what office consumables or services we need, for example, the raw material with which we make our products. Both procurement groups need to be studied. Both can be recurrent purchases and we will measure the effectiveness of the management of purchases thanks to some indicators.
In this way we can apply experience to become more profitable as we learn.
We can help ourselves with a tool from sales activity, such as a CRM, with which, thanks to the history, we can forecast the raw materials we will need to supply ourselves.
Knowing the sales history of a period is useful for forecasting what to buy, controlling stock, etc.
With a ERP we will also control our suppliers, invoicing and accounting. These are indispensable tools for the purchasing department.
Step by step through the purchase process
When to buy, what to buy and from whom, will be defined by parameters to support a company’s need and production capacity.
The department must follow these steps:
Recognize the real need.
Select the ideal provider.
Place the order or purchase.
Review and order acceptance.