Purchasing management is a department in an organisation responsible for purchasing activities. The purchasing management department ensures that all goods, supplies and inventory needed to operate the business are ordered and kept in stock. It is also responsible for controlling the cost of the goods ordered, controlling inventory levels and building strong relationships with suppliers.
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All employees who are part of the purchasing department are responsible in some way for ordering goods. Goods include supplies and services needed for the operations of the business to continue. Purchasing departments are also responsible for ordering inventory. When orders for goods and services are placed, purchasing managers ensure that the correct goods and services are ordered. Purchasing management also seeks to locate new and better products and materials for the business to use.
The purchasing department is also responsible for procuring goods and services. Purchasing employees look at delivery methods and options to find the best deals on prices and shipping methods. When placing purchases, all employees must follow purchasing procedures established by the company.
Controlling the cost of goods and services is one of purchasing management's top objectives. Purchasing employees always look for the best buy at the lowest cost without sacrificing quality. Purchasing employees also must negotiate with suppliers on price and shipping rates and methods to find the best deal.
Controlling Inventory Levels
Purchasing management controls inventory levels. One objective is maintaining an inventory supply that is as low as possible, but still ensuring that all goods needed are always on hand. When a company invests too much money in unneeded inventory, that money is tied up unnecessarily. By monitoring inventory levels and looking for patterns, purchasing management is able to control the level of inventory on hand.
Relationships With Suppliers
Purchasing management also seeks to build strong relationships with suppliers. When relationships are strong, confidence and trust is maintained between the parties. This is beneficial for both companies. The purchasing management department uses suppliers that offer great deals and service.
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