What are the main objectives of purchasing? PDF Objectives of The Purchasing FunctionHow your purchasing department can improve your business.
Purchasing as a function may be defined as the function of procurement with a view to reduce the investment, variety and value of materials so as to facilitate the standardization and competitive marketability of the product.
Purchasing involves all the functions involved from the time the need is felt until the receipt and approval of the materials purchased.Scientific purchasing is an important part of materials management.
1.Purchase of right quality is the main objective of the purchase, because at one time the highest grade material might be the suitable quality, but at the other time it could be a poor quality.The cost and procure-ability factors must be taken into account when selecting the right quality of goods.The engineering-production department is responsible for determining required quality of material and components.To help the buyer in properly discharging his responsibilities for purchasing right quality materials, one or more engineers of the production department must be related with the purchasing department.Purchasing objective of right quality is the problem of standardization and the buyer must know which standard specifications are to be used in the purchase of materials, parts and components.
2.The amount of inventories to be carried is related to the purchasing objective of right quantity.The requirement of the production is what determines the quantity of purchased goods.Purchase of more or less quantities than the requirement will lead to huge inventories and lock-up of finances.If the purchase quantity is less than the requirement, it will lead to the cessation of work and the loss of production.Both situations can be harmful.
The objective of purchasing function is very important.The device of material control and different kinds of inventory control system can be used to effectively discharge purchasing responsibility.Management policy and the way in which conflicting situations of inventories at too high or too low level are reconciled will determine the right quantity of different materials.
3.Purchase at the right price can affect the company's profitability.The right price is a fair price.The buyer should have full knowledge of the materials and parts that will be purchased.The purchasing manager who fails to procure materials at fair and reasonable price is not fit to do his job.
4.Purchase at the right time is a very important objective.If orders are not submitted on time, the production process may be interrupted and there will be a material shortage.The availability of working capital, material requirements based on sales and production forecasts and market situations are some of the important factors that buyer should bear in mind.
5.Purchase from the right source is the next step.The buyer needs to see the vendor's reliability, quick and reliable source, accessibility, cooperation, and other factors.The buyer should carefully consider the possibility of buying directly from the manufacturer or distributor.He should look at the goodwill of the supplier.
These are the main objectives of purchasing function.The objectives of purchase function can be stated in the following manner.
To ensure continuous production and to provide an unimpeded flow of materials.To contribute to the competitiveness of the end product.