Purchasing
From Wikipedia, the free encyclopedia
Purchasing refers to a function in business whereby the enterprise obtains the inputs for what it produces, as well as other goods and services it requires. In larger businesses, the function is frequently carried out in a purchasing department, headed by a purchasing manager.
Purchasing is the informal name of the department in Procurement responsible for issuing Purchase Orders for goods, including material and equipment. In most US Corporations, Purchasing Agents are typically referred to as "Purchasing Specialists" or simply as "Buyers".
BASIC WORK PROCESS
The Purchasing process begins when the when the Purchasing Agent receives a requisition, which is a request for an item or service to be procured.
The Purchaser then evaluates the requistion to determine which suppliers would best supply the material and includes those suppliers on the List of Bidders, or those who will be solicited to submit quotation. The formal request for a quotation is known as an Request for Quotation (RFQ) or Request for Proposal, depending on the complexity of the material.
The RFQ/RFP can be as simple as an text written in an email, to a complex document requesting engineered drawings, manufacturing locations, multiple points of contact at each branch location, and financial statements. The Purchaser will also determine the validity period of the Solicitation of Bids known as the "Bid due Date", the date when the window to submit proposals ends.
After the bids are received the Buyer will evaluate the proposals and tabulate the bids, usually on a spreadsheet. A bid tabulation is essentially a spreadsheet with catorgies used to unformally compare each supplier's proposals to determine which proposal best meets the Buyer's needs.
After the bids are tabulated, the Buyer will make a decision in regards to which supplier will be recommended and will award the order and the Seller will proceed in supplying the material in accordance with the agreed upon terms.
NEGOTIATING
