EDUCATION 101: Purchasing and Procurement

PURCHASING PRINCIPLES

yiwupurchasingagent_zps6edf5727

 

PURCHASING AND PROCUREMENT

Purchasing and procurement are often regarded as synonymous terms. Procurement is strictly a wider term than purchasing .Purchasing implies the acquisition of goods and or services in return for monetary or equivalent payment, while Procurement is the act of obtaining something in any way including force. Purchasing term is the commonly used in the titles of CIPS and the American National Association of Purchasing Agents.

Purchasing may therefore be defined as ‘The function responsible for obtaining by purchase, lease or other legal means, equipment , materials, components and services required by an undertaking for use in production or re-sale’

Purchasing is not therefore confined to manufacturing but is also a functional activity undertaken by private and public Sector service and distributional organizations.

WHAT ARE THE PURCHASING OBJECTIVES?

In General terms, the objective of successful purchasing is regarded as buying the right quality requirements, in the right quantity, at the right time and at the right price from the right source and delivery in general the objective of purchasing is regarded as buying at the right place:

  • To supply the organization with a steady flow of materials and services to meet its needs.
  • To ensure continuity of supply by maintaining effective relationships with existing sources and developing other sources of supply either as alternatives or to meet emerging or planned needs.
  • To buy efficiently and wisely, obtaining by an ethical means the best value for every shilling spent
  • To manage inventory so as to give the best possible services to users at lowest cost.
  • To maintain sound co-operative relationships with other department s providing information and advice as necessary to ensure the effective operation of the organization as a whole.
  • To select the best supplies in the market
  • To help generate the effective development of new products
  • To protect the company’s cost structure.
  • To maintain the correct quality/value balance.
  • To monitor supply market trends.
  • To negotiate effectively in order to work with suppliers who will seek mutual benefit through economically superior performance.
  • To develop staff, policies, procedures and organizations to ensure the achievement or the foregoing objectives.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s