Purchasing Check List

Purchasing implies a monetary transaction.

Procurement is the responsibility for acquiring the goods and services the business needs such as:

  • Raw materials
  • Production parts
  • Maintenance, repair and operating supplies (MRO)
  • Logistics and Supply Chain Consulting services
  • Utilities
  • Workers health care benefits.

Strategies for Purchasing Preparation

Identifying needs such as dependability, long term availability.

Evaluate user requirements to ensure suitability of purchase Forecast when and how purchase will be needed:

  • Identify, select suppliers
  • Develop an efficient ordering system for control
  • Bidding processes
  • Contracts

Procurement Process

Order placing via appropriate channels (i.e. authorised purchase order)

  • Receiving including adjustments for damages, short or over-shipping, incorrect costs
  • Monitoring supplier performance
  • Lead-time to supply
  • Quantity supplied
  • Quality of supply
  • Data accuracy on products prices.

In selecting a supplier, a number of factors must be investigated:

  • Price
  • Quality
  • Reliability
  • Credit terms
  • Shipping costs

Look at the whole transaction cost of dealing with a supplier (not just the cheapest price).

Considerations in Purchasing

  • Annual sales
  • Annual purchases
  • Number of suppliers
  • Number of supplier alliances
  • Total number of purchased products or parts
  • Short and long-term cost effective purchasing
  • Efficient business management of purchasing process.

Analyse what the suppliers requirements are for goods and services:

  • lot sizes,
  • packaging,
  • delivery frequency,
  • supplier responsiveness
  • how much you need and when
  • financing arrangements and costs

Compare your needs and abilities against these requirements.

Do you have the right purchasing process in place?

Do you have opportunities to reduce capital invested and improve service levels?

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