Purchasing’s Role in the Supply Chain

There are many areas of responsibilities in the supply chain. For example, a purchasing department might have positions for a secretary, an analyst, an inventory control clerk, buyer(s), contract coordinator, audit, quality control, transportation, logistics, warehouse, shipping, receiving and more. Depending on your company size you might be responsible for some or all of the above job functions!

Purchasing can no longer be stuffed into a dark corner with a phone, fax and internet connection. In other words, it is no longer considered an isolated function. It must work closely with both internal and external clientele. Internal would be your user groups and external would be your suppliers. For the supply chain to be effective and achieve a competitive edge all these pieces must work closely together.

Lets break down all those above job functions into two groupings.

1)    Logistics
–    The incoming movement of goods from the source (the supplier) to your operation
–    Inventory – management of stock levels, warehousing and storage
–    Distribution of stock items to your user group or customers

So transportation, warehouse, shipping, receiving, inventory control all appear to fit category #1

2)    Purchasing
–    Procurement of goods and services
–    Contracts and commercial terms
–    Vendor Management

Purchasing buyers, contract coordination, audit, quality might more fit category #2

Many in purchasing would make the case that logistics is a by product of purchasing, therefore, logistics is or should report to or be part of the purchasing department. In the supply chain, they go hand in hand and depending on how your organization is structured they can be grouped in a single department. It is important to note that different skill sets are required for the job functions listed here and by saddling an employee with some of these other duties might take away from their true priorities. If profitability is your objective, your Buyers should be focusing their efforts on real buying considerations and not on warehouse management!

Managing costs to ensure the owner is getting the best possible prices for goods at the right time, in the right quantity, to the right location and all per user specifications can be a challenging ask.

Lets focus outward now and the importance of using documentation to manage the above relationships between purchasing and vendor.

My experience has been the busy buyer spends his or her day putting out fires by procuring all the requirements the operation needs to keep running. Vendor management, quality issues, supply contracts can also be part of their responsibility.

Getting quotations, issuing a RFP, RFQ, EOI, LOI, LOU, RFI and other documentation is just another day.

Contracts can be required for MRO supplies, services, inventory replenishment to name just a few.

Audit and vendor performance is another area which is usually handled by the purchasing department.

As you can see there are many moving pieces and responsibilities this department has to deal with. A sure way to help your purchasing team improve productivity is by providing quality templates they can use to expedite this process. Why add more stress by having to create everyday business forms from scratch.  Let RFQPro.com give you a head start by using our edit friendly Microsoft word forms.