Purchasing scope & objectives

May 30, 2007 0 comments

Development of purchasing and supply

See fig.

World class concepts

  • Supplier analysis
  • Single supplier
  • Partnership

Advancing technology

  • Computers
  • Spreadsheets
  • MRP2
  • EPOS
  • EDI

Government and policies

Compulsory competitive tendering (CCT)

Factors leading to the greater recognition of purchasing:

here will the the schema when this service becomes available

Purchasing scope & objectives

Finite resources

  • careful planning is essential

Fewer but larger suppliers

  • Iron & steel industry virtually annihilated
  • Chemical industry in the hands of a few vast conglomerates
  • Pharmaceuticals - same story
  • Car manufacturing is a global business

Increasing environmental awareness

  • waste disposal
  • re-cyclable components
  • returnable containers
  • concern for the planet

Development of purchasing and supply

  • Barter
  • Development of Currency
  • Banking
  • Rise of literacy
  • Improvements in communication
  • Letter, telegraph, telephone, telex, fax, EDI, e-mail
  • Pack-pony, horse & cart, train, lorry, artic, RDC

Purchasing scope objectives

Control of stock and inventory

Facts a buyer should know:

1. What material is required? (specification, design)

2. What quantity? (Production control, Purchasing manager)

3. When is it required? (Production control, Purchasing manager)

4. What quality is required? (Senior management, quality manager, program manager)

Inventory control

Control of stocks:

  • Raw materials (RM) + bought out parts (BOP's) & fuel
  • Work in progress (WIP)
  • Finished goods (FG)

Management of storage within the organization


  • Long term
  • Short term
  • Capacity v demand?
  • Time in storage?

Management of storage


  • Multi-national
  • National
  • Small and medium enterprises

Distribution facilities within the organization I.e.

Physical areas:

  • Incoming goods
  • Buffer stocks
  • Finished goods stores

Materials management

Control methods

  • Material Requirements Planning (MRP)
  • Manufacturing Resources Planning (MRP2)
  • OPT
  • Just-in-Time (jit)


schema becomes available when service avaliable

Supply Chain

schema becomes available when service avaliable

Posted by Lisa
Categories: Supply Chain Management


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