Buyers purchase a lot of different items for their company. Managing a category of purchases usually involves understanding and buying commodity products. In this video, learn the three characteristics of a commodity and an excellent approach to classifying and managing your commodity purchases.
- Buyers purchase a lot of different things … for their company in a wide range … from things like office supplies to corporate jets. … It makes sense that the approach to purchasing can be … very different based on what it is that you're buying. … That's why I want to talk now about category management, … a very special type of sourcing activity. … Managing a category of purchases usually entails … buying a commodity for the company. … A commodity has three distinct characteristics … that are significant to you as a buyer. … First, there are a lot of suppliers of this item. … Agricultural products are a good example of this … because most products can be bought from producers … and distributors all around the world. … Second, the item you are buying is important to the company. … Perhaps it's important because it's a key ingredient … to your final product, … as steel is important to an auto maker. … Perhaps it's important because it's a very large purchase. … And last, the total cost of the item is an important part …
- Explain the purchasing process.
- Define purchase order.
- Describe the intent of a purchasing policy.
- Distinguish types of purchasing structures.
- List the steps of selecting a supplier.
- Identify enablers for success in worldwide sourcing.
- Perform price and cost analysis.
- Measure supply management performance.