Purchasing is the field that deals with all purchasing activities of organizations. This involves purchasing goods, products or services at the right conditions and price in order to achieve the goals of the organization.
The impact of the purchasing profession
The role of purchasing and supply management is bigger than you think! Did you know that approximately 70% of companies’ turnover is purchasing? And that suppliers are therefore extremely decisive for the success of organizations? And did you know that the government purchases more than 70 billion annually, ranging from infrastructure to personnel?
As a buyer you can create value for your organization in a wide variety of areas. You can reduce supply risks, contribute to product innovation, work with suppliers to contribute to sustainability and thus contribute to the commercial result and the operating result. As a purchasing professional, you are involved in socially relevant matters.
Purchasing: a challenging field
According to ehuacom, professional purchasing contributes to corporate social responsibility (CSR), for example by realizing product innovations with suppliers or by purchasing sustainably. The purchasing profession is therefore in the spotlight. Purchasing is continuously developing and offers varied opportunities for professionals, both nationally and internationally.
Purchasing is a challenging and inspiring field with plenty of vacancies for enthusiastic purchasing professionals. There is a high demand for buyers. In fact, the UWV has described purchasing as a ‘opportunity profession’ and job seekers can take a Nevi course or training through the UVW and in consultation with their job coach.to follow. You can read more about the options for becoming a buyer or contract manager here.
Facts about purchasing
Did you know that approximately 70% of companies’ turnover is purchasing? And that suppliers are therefore extremely decisive for the success of organizations? Did you know that the government purchases more than 70 billion annually, ranging from infrastructure to personnel?
Purchasing strategy
Purchasing policy is an integral part of the organizational strategy. Purchasing must ensure that strategic vulnerability is reduced if a delivery or supplier fails. Purchasing must contribute (via suppliers) to innovation and the realization of organizational objectives. Multinationals, SMEs, government organizations, hospitals – they all have to deal with a dynamic environment, changing customer wishes and increasing globalization. In every organization, buyers face the same challenge: contributing to the organizational strategy through purchasing.
The organizational strategy sets the guidelines for optimally meeting customer needs and being distinctive compared to competitors. Purchasing plays an important role in this. After all, with a purchasing ratio of 60%, for example, suppliers deliver 60% of an organization’s added value – and are therefore 60% responsible for achieving the organizational strategy.
Organization
Purchasing is done by everyone. As the size and importance of purchasing flows increase, organizations become more aware of the need to coordinate purchasing to achieve synergy. People, resources and knowledge in the field of purchasing must be bundled. Organizations as a whole can even decide to collaborate with other organizations.
The purchasing organization must match the chosen purchasing policy. Because various officials and departments are involved in purchasing, it is important that all activities are well coordinated. And because purchasing is becoming increasingly complex, attention to project and team management is also required. The crucial question when shaping the purchasing organization is: Who is responsible for the purchasing strategy and for the tactical and operational purchasing process? The next question is where in the organization those people are placed.
Purchasing process
Purchasing ensures timely delivery of services and goods to ensure the progress of the business process, buyers ensure ‘rationalization’ of the procedure through a complete functional specification, analyzes of the market and suppliers and a sound decision-making process. The purchasing process consists of several phases that are closely related to each other. The buyer is concerned with all phases and especially with the coherence between them.
- The specification is a description of the properties that the products or services to be purchased must meet.
- Marketing research. Information is collected during market research so that it can be determined which suppliers are the most suitable. A request for quotation is sent to these suppliers, after which the received quotations are compared based on award criteria.
- If the quotations do not optimally match the wishes, it is important to negotiate with suppliers. The most suitable supplier is then chosen and the contract is drawn up.
- Operational purchasing. The goods or services are ordered and it is then monitored that they are delivered and meet all requirements. After payment, two tasks remain; archiving relevant documentation and updating supplier data in the vendor rating system.
Information provision and automation
Purchasing quickly involves thousands of item details, suppliers, orders and invoices. A purchasing system is an automated system that helps to clearly process all this data and important management information. Many facets play a role in this:
- E-procurement. Electronic procurement, or ‘electronic purchasing’ is the use of internet technology and tools in the purchasing process. There are numerous applications, such as simplifying the operational process, increasing market power, going through the purchasing process or managing knowledge.
- Spend analysis. Figures are needed to get a grip on purchasing expenditure. Buyers investigate questions such as: Which suppliers do we buy from? And which product groups and quantities do we purchase?
- Vendor rating. Or ‘purchasing performance measurement’. This part of purchasing management measures how suppliers perform in terms of, for example, delivery time, quality and price. By periodically feeding this back to a supplier, continuous improvements can be made. In addition, the effects of all purchasing activities are monitored, such as the internal customer focus and information provision of buyers.
