Why do you need purchasing
best practices? Well because purchasing cost can greatly benefit on company’s
profits. Every time you save money on purchasing you are directly contributing
to a company’s bottom line. One Dollar saved is One dollar earned.
So how do you define
purchasing best practices and ensure that they are adhered to? Well you define
your purchasing strategy and ensure that all staff understand it and all your
purchasing staff adhere to it. So what kinds of purchasing strategies go into
your purchasing best practices?
ePrcourement
Technology:
Using eprocurement
technology enable your company to get quicker and cut down additional
communication costs. This also enables purchasers to access supplier catalogues
and enhances the choice of products that may lead to purchase savings. Buy and
install the best technology that your company can afford in order for your
purchasing department to be the best that it can.
Suppliers
& Contracts:
Choose a good spread of
suppliers who can provide you with reliable supplies of quality products at
good prices with good terms. Leverage your suppliers against each other so that
competitive prices and terms are possible. Keep the supplier information up to
date. Provide all major suppliers with a Master Agreement so that they are
contracted to supply your products at the prices and terms agreed.
Supplier
Relationships:
Ensure that good
relationships are maintained with your suppliers so that problems can be easily
solved you take the best advantage of their services.
This is one of the key purchasing best practices as happy, well looked after suppliers ensure that purchasing is a relative stress and trouble free activity. Preferred Supplier List should be made and it must be reviewed and updated on a regular basis.
Stock:
Ensure that ordering is only
undertaken when the stock needs to be replenished and that the stock is kept at
its optimum level. These must be consolidated if at all possible. Deliveries
must be tracked and all goods checked in. Only quality items that are as
ordered is to be accepted.
Negotiation:
Negotiate hard but fairly so
that your suppliers understand your need for keen prices and good terms but
still wish to do business with you.
Centralized:
All purchasing information
should be centralized and the purchasing activities centralized as much as
possible.
Integrated:
Purchasing should be fully
integrated with the stock room, warehousing and accounting so that profits are
enhanced and a complete financial picture is available.
As you can see the above
purchasing best practices embrace all of the purchasing activities and should
lead to a well-managed, efficient and profitable purchasing department and
ultimately profitable company.
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