Importance Of Purchasing Operations
Have you ever wondered how the products you need to get from the factory to the shelves of your local store? Well, get the product to the store is a process of various steps that take place between the seller (supplier) and the buyer (purchaser). Now, one of the most important steps in this process is the purchasing operation which is vital to the transaction of business between the purchaser 's and the supplier. It is for this reason that conducting an effective purchasing operation is of the most important to the purchasing company as they want the quality products at the right price. How vital is purchasing operation to a company’s success?
The rules of the purchasing operation have …show more content…
They want the monitor the prices of the product or products they are pursuing from a supplier. As it’s the purchaser choice to accept the price quote or look of another supplier with the price that fits their demand. Part of the supply manager job is analysis the cost of the product or service that a supplier is offering and compare it with others supplier. In other words, they must do a price analysis, a cost analysis and a total price analysis to determine if the product or service is worth what the supplier is suggesting. As stated before supplier wanted to get as much as they can for their products but in the advance in the industry supply manager try to negotiate the price to get it down or seek alternatives. Cost management a varies with the product being purchased, but supply manager should look to getting the best price for their company. Getting a supplier to cut cost can be more than most people image because as a supply manger you must go in to the process with all the skill need to effectively control the situation that the supplier is presenting you. You also need a team of experts that can back you with the right research and know who. By controlling the situation, you want to get the supplier to come down to the price you quoted because you done research on the product. Purchasing manager may not know the pricing strategy of the sell but it not their place to know but the can use the producers price index to manage the price of the product they want to purchase. As cost analysis is a technique that require doing a lot of research to cut the cost of the supplier. Supplier mangers can have the upper hand in driving down the price if they apply the techniques