Lecture and notes etc........, Lecture notes of Marketing Management

Download Lecture and notes etc........ and more Lecture notes Marketing Management in PDF only on Docsity!

Purchase Management

PURCHASE MANAGEMENT

One of the most important activities of Materials Management is Purchasing. Purchasing ensures the following:

• RIGHT MATERIALS are purchased, at
• RIGHT PRICE, from
• RIGHT SUPPLIERS, at
• RIGHT TIME, & delivered to the
• RIGHT PLACE. Purchasing Department – The Purchasing Department is the interface between the Supplier of Materials and the Production Function.

Objectives  To buy competitively  To buy wisely  To keep inventory investment and inventory losses at a practical minimum  To develop effective and reliable sources of supply  To develop good relationships with the supplier community and good continuing relationships with active suppliers  To achieve maximum integration with other departments of the firm  To handle the purchasing and supply management function in professional, cost- effective manner

Functions of Purchasing Management

1. Receive Purchase Requisition

• Starting point of procurement activity.
• It is the Statement of Requirement of Production.
• Also called ‘Indent’ 2. Review and evaluate Requisitions Purchase Department reviews the following:-  (^) Item description  (^) Quantity  (^) Estimated purchase price or last purchased price

7. Market research and Information

• (^) Discussions & meetings between supplier representatives & company officials.
• (^) Keeps in check, the latest developments with respect to the company and its product.
• (^) Studies the market and keeps in track of new suppliers.
• (^) Studies new developments in production materials & processes.

8. Payment Authorization

• (^) Ensuring all goods are delivered before payment is made.

9. Cost Reduction

• Import substitution
• Value analysis
• Engineering 10. Record Keeping
• Thousands of products and materials, hundreds of suppliers
• Accurate information system is essential. 11. Miscellaneous activities Such as - applying for import licenses, liaisoning government agencies, disposal of secondary items such as scrap, defectives, surplus etc…

Purchase Organization Definition The Purchase organization is an organizational unit within logistics. Almost all business transactions related to procurement are carried out in a purchasing organization.

Structure of Materials Organization