Purchasing needs to be properly organized for success, and that definitely requires the purchasing organization to be aligned with the overall company strategy. There are three types of structures, each with its own clear-cut advantage, and departments are often organized into two distinct groups.
- According to Yogi Berra,…the great professional baseball player,…"if you don't know where you are going,…"you might wind up somewhere else."…His point is that in order to get where you want to be,…you really need to be organized towards that goal.…In fact, I remember reading, some time ago,…that organization with a focus on where you are going…is one of the key skills of successful business startups.…Just like you and me,…purchasing needs to be properly organized for success.…
To be successful, you should properly align…the purchasing function with the company's…overall business strategy.…How does a company control their cost?…What is their position on risk?…Are they growing globally…or are they more of a local company?…These corporate strategies define the structure…and strategy of the purchasing function…and structure further defines…how purchasing decisions are made,…and the scope of each job within the purchasing department.…There are three types of purchasing structures.…
First there is centralized purchasing.…
- 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.