The simplest response to the question “What is the objective of purchasing?

” is obtaining the
right products or services, at the right time, in the right quantities, delivered to the right
place, at the right price with perfect quality. As is imagined from such a comprehensive
answer, the buyer is faced with the task of pursuing not just one but a multitude of objectives,
some of which are contradictory. Buyers are continually faced with the dichotomies arising
from the often conflicting objectives of pursuing simultaneously optimal quality, service,
and price. Rarely will all three elements be obtainable from a single supplier. Often a buyer
must select a supplier based on balancing all three of these cost elements or total cost.
Although total cost management is perhaps the most fundamental ongoing activity of
purchasing, there are several other key objectives.
• Providing an uninterrupted flow of materials and services. The foremost goal of the
purchasing function is to ensure that the company is not hindered by inventory and
service shortages. Shortages cause production downtime, generate excess costs for
expediting, interrupt the normal flow of product and cash through the channel, and
strain relations with customers on one end of the supply pipeline and suppliers on the
other end. Just buying inventory and other resources, however, is not enough.
Purchasers must also continually search for methods of increasing the velocity of
the flow of goods and services through the supply channel without accompanying
increases in carrying and transportation costs.
• Purchasing products competitively. This objective requires purchasers to continuously
search for sources of supply that provide the best combination of quality, price, and
service relative to the enterprise’s needs. Pursuing this objective means that buyers are