Purchasing management

Purchasing management is the management of purchasing process, and related aspects in an organization. Because of production companies purchase nowadays about 70% of their turnover, and service companies purchase approximately 40% of their turnover , purchasing management is one of the most critical areas in the entire organization and needs intensive management. Purchasing management also covers the areas of outsourcing and insourcing. Models used to aid purchasing managers include the Newsboy model as well as the Order up To (OUT) model.

Purchasing Process

Purchasing Process includes as usual 8 main stages as follows:

1. Market survey

Requisitioning

1. Approving
2. Studying Market
3. Making Purchase Decision
4. Placing Orders
5. Receipting Goods and Services Received
6. Accounting Goods and Services
7. Receiving Invoices and Making Payment
8. Debit note in case of material defect

Purchasing Management Process

Purchasing Management Process consists usually of 3 stages:

1. Purchasing Planning
2. Purchasing Tracking
3. Purchasing Reporting

Purchasing Planning

Purchasing Planning may include steps as follows:

• creating purchasing projects and tasks
• providing related information (files, links, notes etc.)
• assigning purchasing tasks to employees
• setting task priorities, start/finish dates etc.
• assigning supervisors
• setting reminders
• control and evaluation

Purchasing Tracking

Purchasing Tracking consists of:

• checking task's status and/or history of changes
• receiving status notifications
• sorting, grouping or filtering tasks by current status
• highlighting overdue tasks,,,

Purchasing Reporting

Purchasing Reporting includes:

• comparing actual and estimated values
• calculating purchasing task and project statistics
• sorting, grouping or filtering tasks by attributes
• creating charts to visualize key statistics and KPIs