Optimize Purchasing: Process, Policies, and Supplier Relations
Stages in the Buying Process
Stages in the buying process: To know the market, analyze information concerning the production, distribution, and sale of a certain material to determine the purchasing policy. Sources of information include the internet, government agencies, journals, and databases. Then, assess needs by analyzing what to buy, when, and the order quantity. Companies centralize purchases through the purchasing department, which receives applications via an internal newsletter detailing the required material or product. Upon receipt, the purchasing staff reviews and classifies them for the request. Next, deals and value involve requesting product information and assessing factors like price, quality, delivery times, reliability, continuity, flexibility, technology level, location, and supplier policies. Tenders are required when buying a product for the first time, for high-cost purchases, to expand the supplier portfolio, or when unsatisfied with current suppliers. Then, search and selection of suppliers involves listing companies offering products or materials and requesting submissions based on specific factors. Selection criteria include product quality, timely delivery, competitive pricing, service excellence, money-back guarantees, facilities, technology, and reputation. Negotiation and execution of the purchase clarify points not specified in the bid, establishing long-term business relationships. Finally, verification and monitoring of purchase ensures the material meets requirements. Successful purchases lead to lasting relationships, streamlining future orders.
Purchasing Department
Purchasing Department: Responsible for acquiring goods and services to achieve objectives. Duties: Manage procurement operations, including initiating, managing, and monitoring requests to suppliers, acting as liaison between departments, and ensuring written, approved purchase requests. Regulate supplier relations with fair and courteous treatment. Ensure compliance with company policies regarding employee personal purchases.
Purchasing Policy Types
Contract: Finalize an order with terms for acquiring materials, products, or services to meet future needs.
According to market conditions:
- Stable markets: Industrial products and services, insensitive to supply and demand in the short term.
- Unstable markets: Raw materials with significant short-term price changes, influenced by political, weather, economic, and speculative forces.
According to the origin of needs:
- Cyclic: Routine shopping.
- Special: Large investments.
- Seasonal: Made with seasonal products.
- Instant: Meets daily needs.
- Opportunities: Occurs when prices are low.
Comakership
Comakership: Managing buyer-supplier relationships with common goals.
Supplier Levels
Level III: Conventional Provider: Negotiations based on minimum quality and price, short-term orders, 100% supply assessment, avoiding store errors.
Level II: Associate Provider (Operational): Long-term, guaranteed quality value, full supply responsibility, acceptance testing without direct production process, no stock, frequent small deliveries, systematic quality and price improvements, consultations, and provider training.
Level I: Partner Provider (Global): Cooperation in design, joint R&D investments, technological progress, information exchange.
Regulations
Regulations:
ISO 9000 Regulations: Quality management systems guidelines.
ISO 9001 Regulations: Minimum requirements for quality management systems, used for certification or contractual purposes.
ISO 9004 Regulations: Guidelines for continuous improvement beyond ISO 9001.
E-Procurement
E-Procurement: Buying and selling works, supplies, and services through websites connecting qualified buyers and sellers.
Outsourcing
Outsourcing: Economic process where a company moves resources for specific tasks to an external firm via contract, especially for specialized services, involving staff hiring or resource provision.