THE IMPORTANCE OF PURCHASING IN AN ORGANIZATION

           

 IMPORTANCE OF PURCHASING IN AN ORGANIZATION

 

         A purchasing department is important as it will minimize costs of purchased goods, screen vendors for quality and track orders from initiation to reception. The quality of the purchasing department has a significant impact on a business's profit margins. 

          Purchasing is the add value to organizations in controlling supply costs and sourcing supplies from different sources to offer the best pricing on a particular item. Purchasing within organizations is often overlooked and companies usually pay more for items than they really need. Purchasing can save money for organization if a company implements a mandatory purchasing policy requiring employees and departments to route all purchasing requests to the purchasing department or a particular employee. One thing for small businesses is that they don't have a dedicated purchasing employee just focused on purchasing. Most employees of small businesses wear many hats and perform a lot of different functions.

          One way for small businesses to save on procurement of goods or services is to plan ahead and allow an employee to do some research on sourcing products. Another great idea to help save the organization money is to join a cooperative purchasing association that has already negotiated and established contracts for common everyday products such as office products, medical supplies and amount of other type items. There are many group purchasing organizations that have office supply contracts established where you can save a considerable amount of money versus running out to your local office supply store where you will get charged twice as much for an item. Some of the national office supply stores such as Staples and Office Depot will link your account from a group purchasing organization to a local store where you can obtain contract rate pricing at a local store versus ordering online.

          The common issue with many organizations is the fear of change. If a vendor has been providing products or services for years to your organization employees that deal with the vendors have built a relationship that they are afraid to break to save money. You have to remain competitive in today's economy and if you can get the same product any where at a cheaper price and the same service that your current vendor provides then you need to really consider a change. Management needs to dictate to employees that they need to consider cost savings measures to ensure that the company spends less, but provides great customer service. Finding a balance between cheaper purchasing options and customer service presents many challenges. Just remember at the end of the day that you saved the company money and offered a product or service that was worthwhile and affordable.

          Purchasing should not be taken lightly in an organization, but purchasing should not slow down what you are in business to provide. Purchasing requires planning of resources where there is a common balance between saving money for the company and offering a quality product or service to your customer.

Purchasing professional's goal to a company should be to provide the best pricing for everyone as well as communicating across the organization to find out needs. Research is a critical component of any purchasing professionals daily work schedule in finding sources that offer quality products or services at a price that your organization can afford.

          Companies should encourage their purchasing staff to save money and to find the best value for the company's money. Lastly, we hope all the readers can get a lot of information from our ideas about The Importance Of Purchasing In An Organization.