Importance of purchasing and supply management in companies?

Purchases in a company are related to supply management. Since they must realize and negotiate contracts of goods and services, that support the production and the success of the same; through the most suitable techniques, tactics and types of negotiation strategies .

Both procedures are important for the progress of the business, since the idea is to supply itself with sufficient resources, which offer the best quality and the lowest cost; thus increasing the profit of the company and reducing the existing inventory.

Currently, companies intervene more frequently in globalized markets , and competition is becoming stronger, both nationally and internationally; therefore, a competitive advantage is very important.

What do we refer to as purchasing management in a company?

It refers to tasks, both strategic and operational, carried out by the company, that is, a series of steps that guide this entire process towards the goal set, by obtaining services or goods; thus guaranteeing the quality, the time and of course the best cost of the same.

How is purchasing management carried out in a company?

When a purchase is going to be made, the first thing is to make a list of what is needed , then the document is made to request said purchase, detailing the quantity of each product or service to be contracted.

Then it goes to the review, to make the purchase order , then the finance department must approve the budget, later several requests for quotes are sent to the suppliers to choose the most appropriate and a contract is signed with them.

Afterwards, the purchase order is sent , which must be accepted for greater legality, then the supplier sends the order to the buyer and he must review it, giving the approval; later it is finalized, with the payment of the invoice.

What do we refer to as a company’s supply chain and what is its objective?

It refers to the monitoring that is carried out, since the supplier dispatches the merchandise to the buyer, either to a wholesaler, a retailer or a consumer; in other words, to all that information process , which is related to materials, finances, among others.

All these aspects must be coordinated and integrated in the company, the main objective being to reduce the existing inventory ; hence the importance and advantage of the purchasing department division , which is in charge of always keeping what is needed available.

There are various software options to manage this process , some of these have a web-based interface only, to be accessed from any browser; others focus, on application provider services or ASP, to be accessed through a network.

The importance of purchasing and supply management in companies

As mentioned at the beginning, both steps are important , in the case of purchasing management, because the company can choose the best budget from the beginning in each decision that is made, making the most of all resources; In addition, costs are reduced.

Also to obtain a better communication and relationship with suppliers, which is essential for the contracts to be successfully concluded; Likewise , financial risks are avoided , as well as the time that the process itself may take.

The supply chain is key to the operational task of the company ; therefore, we cannot ignore the importance of a good organizational structure for the success of the company, because it will guarantee a good response from customers.

This happens because it encompasses all the movement that begins with the raw material, until it reaches the final distribution; Success will depend on planning , dynamism in the physical execution and control or evaluation of the chain.

Both processes are necessary and of vital importance for any company that wishes to achieve success; hence the importance of knowing the probabilities in business for decision making , according to needs and making the necessary corrections if necessary.

 

by Abdullah Sam
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