The Purchasing Management

The acquisition of materials is vital in any business. Approximately 50% of the turnover of a company is the average value of purchased materials. This data can give us an idea of ​​the importance of shopping within the organization. Many times companies focus on increasing sales with the aim of improving profit. However, a decrease in the cost of purchasing management has a direct impact on profit.

Then, as an example, shows a comparison between the impact it has on the profit, an increase of 20% of sales figures and the reduction of 2% of the cost of purchasing





As we can see a reduction in the cost of purchase has a greater impact on the benefit that increased sales. This is due primarily to increased sales is usually a capital increase financial and wages, while cost reduction can only be increased in any case management.

Objectives of the purchasing department

The objectives of the purchasing department to comply in time, quantity, cost and quality are:

· Provide and maintain a steady flow of materials and services to the needs of the company · Purchase prices. One key objective is to obtain the best possible price while respecting the values ​​of quality and delivery requirements. · Maintain stock turnover rates best. Minimize the inventory with a reasonable level of service. · Avoid risk of obsolescence of inventory. Monitor innovations in the market helps to avoid · Maintain good relations with suppliers and partners to provide relevant information and technical support. · Alternative sources of supply. Best prices are obtained having contacts with potential suppliers that pressing current providers. · Ability to negotiate. In a good negotiation both sides will be satisfied. · Record information. The controls within the purchasing management and regular audits are effective methods to discourage corruption.

? Areas of action

Cost reduction can be achieved mainly in 4 areas:

Selection of suppliers · Determination of optimal price specifications · Study · Contact with potential suppliers.

The selection of suppliers is a fundamental part of the activities of purchase. In analyzing the supplier must take into account different aspects of it such as technical, financial, human resources or management. The technical criteria we indicate the supplier's ability to supply products to the specifications we are looking for. The financial criteria is intended to determine the financial soundness. Furthermore, as I said also points to consider if the provider has a good disposition and a positive attitude in the workplace, as well as good organizational and management capacity.

Determining the optimal price. Before negotiating the price with the provider, we must analyze the price that we consider fair for a particular product. The more you know the market prices and costs of a product will have greater advantage in the negotiation. This price analysis can be performed with different methods, such as the study of market prices different offers or requesting a cost analysis of the product to buy. The aim of this study is to understand costs if the price offered by the provider is fair and reasonable.

In addition, there are different actions to improve the purchase price once brought a business relationship with the supplier.

The reduction of the purchase price can be harnessed for the following actions:

· Negotiation to purchase larger quantities. This can be achieved with adequate standardization of products and proper planning of supply. · Avoiding technical luxuries. Sometimes we provide technical specifications that are beyond our needs. · Increasing purchasing power. It is the importance of our purchases on your sales volume. Sometimes, reducing suppliers increase this ratio. · Tools of the buyer. Market research, purchasing management programs, etc ... can help identify synergies and improve prices.



Procedure for Shopping

The buying process consists of several stages which are detailed below:

Recognize the need to purchase · Describe the need, defining the technical requirements, quantities and service required • Determine the source of supply · Determination of purchase price and conditions · Prepare and launch the command of purchase · Order Tracking · Receiving and inspection · Process merchandise invoice and payment to the vendor · Maintain documentation and supplier relationship



Within this procedure, the first two phases only be conducted for new or have not yet acquired. The rest, of course, will be a repeat for products that work daily.

The time you devote to each phase of the process varies considerably. The order tracking and management of documents is often, usually use most of our time.



In summary, management of shopping is a fundamental part of the business process of any company, and therefore the objectives of this department should be clearly marked by management in accordance with company strategies.

The supplier selection process is very significant for the proper functioning of the organization, so you should consider the financial and human quality than those already known, technical soundness and quality / price.

The purchasing department is responsible for the continuity of service providers, so you must maintain a continuing understanding of it, and if necessary, replace the power supply.

The purchasing manager and his department must maintain the ethical principles of the buyer not make misleading or subtle actions with suppliers and maintaining a level of integrity in all their business relationships.