PRESENTED BY DR THEO ADJEI-KUMI

What is PURCHASING? Job Description of Purchasing Department

Main Objectives of Purchasing Department

Functions of a Purchasing Department
Supplier Selection Quality Control Maintaining Records Progressing Purchasing Activities Production of Orders Stock Control Overview Supplier Relationships Monitoring of Technological Advancements
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Purchasing Cycle

What is PURCHASING? Definition PURCHASING is a department in materials management with the responsibility of ascertaining an organisations materials needs, selecting suppliers, agreeing terms, placing orders and receiving the goods/materials. Purchasing is orientated to providing a complete supply function service for users within the organisation

JOB DESCRIPTION OF PURCHASING DEPARTMENT

Formulation of policies, approval of materials strategies and ensuring implementation through efficient and flexible organisation and administration

To contribute to the policies and administration of the organisation

To procure stores materials to the current specification at the most economic value. To procure to meet constantly changing deadlines imposed by the work schedule.

Maintain a programme of value improvement in materials

To develop, train and provide opportunities to managers and staff.
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JOB DESCRIPTION OF PURCHASING DEPARTMENT (contd)

To locate and develop new sources of supply, materials processes and methods in order to facilitate innovations, product improvement and new product. To control delivery of materials To negotiate credit in order to minimise working capital tied up in materials Maintain good supplier relationship Forecast materials availability and prices for an appreciable period ahead for inclusion in financial forecasts To develop, train and provide opportunities to managers and staff.
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MAIN OBJECTIVES OF PURCHASING DEPARTMENT

Cost Reduction Continuity of Supplies Contribution to an Organisations Corporate Plans

Control of Negotiations

FUNCTIONS OF PURCHASING DEPARTMENT

SUPPLIER SELECTION The benefits of a good supplier selection are : Reliability Quality Delivery Performance Reputation Continuity of Supplies5

FUNCTIONS OF PURCHASING DEPARTMENT (contd)

SUPPL1ER SELECTION CRITERIA Supplier selection decision is based on: Relative prices of goods (between competitors) Delivery dates, methods and cost of delivery Reliability in terms of Performance of Materials, Delivery Dates and Prices Reputation of Suppliers within the Industry Quality
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FUNCTIONS OF PURCHASING DEPARTMENT (contd)

Quality Control Quality and performance of materials purchased

Purchasing Manager must be involved at all stages of the process in order to establish acceptable levels of quality Maintaining Records
The following information will be maintained: Suppliers past performance Current prices of goods Copies of Orders, Contracts and Current Agreements Progressing data for outstanding orders 7 Specifications and standards as set by user department

FUNCTIONS OF PURCHASING DEPARTMENT (contd)

Progressing Activities At each point there may be many outstanding orders These outstanding orders may be at various stages of completion A degree of control is required from the Purchasing Department (PD) Advantages of progressing Supply is aware of PDs interest and control Possible late deliveries and delays eliminated PD is very much aware of stage of purchasing
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FUNCTIONS OF PURCHASING DEPARTMENT (contd)

Production of Orders Completion of a standard order form for every transaction entered into with supplier.

Stock Control Overview Maintenance of a close working relationship with stores Needs information from stores to undertake purchasing
Supplier Relationship Relationship between organisation and Supplier is sound The Relationship has a direct impact on the Continuity of Supplies
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FUNCTIONS OF PURCHASING DEPARTMENT (contd)

Supplier Relationship Advantages of a Good Supplier Relationship Improved reliability i.e. Prices and Dates Response even in Emergency Situations i.e. preferential treatment during shortages Cooperation, especially in alteration of specifications and designs Monitoring of Technological Advancement
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This is the sequence of events that has to be done before an item is finally delivered to stock
Payment Need Requisition

Invoice Checking

Sourcing

Stock Control

Selection of Potential Suppliers

Storage

Negotiations

Inspection

Delivery

Progressing

Ordering

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THANK YOU

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