Question

Think of a recent purchase you made in your everyday life. Explain how the purchasing process would be different if you were buying the same product for a firm on a regular basis versus purchasing it for yourself.

Please write clearly and legibly. Answer this question with great detail. Thanks

Answer 1

Purchasing is a process that a business or organization uses to get goods or services to achieve a goal. Although there are many organizations that try to set standards in the purchasing process, the process can vary considerably from one organization to another. Purchasing Managers of Public Procurement Introduce procedures and standards for acquiring organizations. Most organizations use three-way verification as the basis of their purchasing program. This includes three departments within the organization that complete the individual parts of the acquisition process. All three departments do not report to the same senior management to prevent unethical practices and give credibility to the process. These departments can be buy, receive and call. Or engineering, procurement and limiting accounts; Or factory manager, purchase and accounts due. Combinations can vary considerably, but the purchasing and accounting divisions usually consist of two of the three departments involved.

When the receiving department is not involved, it is usually called a two-way inspection or a two-way order. In this situation, the purchase department issues a purchase invoice is not required. When the invoice reaches the order, the invoice payment department will go directly to the buyer to check whether the goods or services have been received. This is usually done for goods and services that will go through the reception. Some examples are electronic distribution software, NRE work, consulting hours, and more.

Historically, the purchasing department has procured supplies, services, equipment and raw materials. Then, in an attempt to reduce administrative costs related to the recurrence of basic use, a "blanket" or "essential" agreement is concluded. These types of agreements usually last longer and increase the scope to scale the concept. When additional supply is required, the supplier will be given a simple exemption for the provision of goods or services.

Another way to reduce administrative costs associated with recurring contracts for common material is to use corporate credit cards, also known as "purchase cards" or simply "P cards". P card applications are different, but they all have internal audits and audits to ensure proper use. Purchasing managers know that after a low-cost consumption contract is terminated, the distributor can play a smaller role in the operation and use of the contract. There is still oversight of forms of auditing and monthly report review, but most of their time is available for large purchase negotiations and other long-term contracts. These contracts are usually renewed annually.

This trend beyond the daily procurement function (strategic acquisition) has led to many changes in the industry. The first is staff reductions. The purchasing section is smaller. The bureaucracy does not need to make orders for each unit as it used to. Another shift is the focus on contract negotiations and the purchase of large capital instruments. Both features allow the purchasing department to make the largest financial contribution to the organization. New mandates and titles for strategic supplier management and resource suppliers have emerged. These specialists focus not only on the process of bidding and negotiating with suppliers, but also on the overall distribution function. In these roles, they can add value and save the most money for the organization. This price is reflected in lower inventory, fewer staff and faster access to final products for consumers. The successful acquisition of managers in these roles has led to new tasks beyond traditional purchasing functions - logistics, material handling, distribution and warehousing. More and more purchasing managers have become supply chain managers who manage the additional functions of their unit work. Purchasing managers are not the only ones becoming supply chain managers. Logistics Manager, Material Manager, Distributor etc. All have increased to a wider range of functions, and some are responsible for the functionality purchased now.