Purchasing Policy and Procedures

Purchasing policies: ‡ Policies defining the role of purchasing ‡ Policies defining the conduct of purchasing personnel ‡ Policies defining Social and Minority business objectives ‡ Policies defining buyer-seller relationships ‡ Policies defining operational issues

Purchasing Policy and Procedures cont

Purchasing procedural areas: ‡ The purchasing cycle ‡ Proper use of purchasing forms ‡ The development of legal contracts ‡ Operational procedures

Linking purchasing and corporate strategy

‡ Translating Corporate objectives into purchasing goals ‡ Integrating Strategy development ‡ Translating purchasing goals into purchasing objectives

The purchasing strategy development process

‡ Define business unit requirements ‡ Define the strategic importance of the purchase requirement (portfolio analysis) ‡ Define business requirements and conduct market research ‡ Set goals and conduct gap analysis ‡ Develop sourcing strategy and objectives ‡ Execute strategy ‡ Monitor results and review performance

Types of purchasing strategies

‡ ‡ ‡ ‡ ‡ ‡ ‡ Supply base optimization TQM of suppliers Global sourcing Longer term supplier relationships Early supplier design involvement Supplier development Total cost of ownership