Purchasing is one of core functions of any Industry.

May it be a manufacturing industries working in area

as small as paper clips or as big as giant bulldozer. It touches all day to day aspects like from your house
hold item to big machines. It has long list like manufacturing, retail, military and other industrial
organizations, traders, software firms, OEMs and may more who use purchasing in day to day business.
Even your mom is purchasing something for you in your day to day life. You also go on purchasing the
for your friends, colleagues & family so in a way we are associated with it.

As you can now see that purchasing is being used in our day to day life. Now I am going to ask you to
broaden your vision. If you can focus on purchasing in your daily life what you can see ? …. Think!!!!!!. As
you start to look closely now you can observe that most of our life is related to purchasing. Like
purchasing of house, Purchasing a new car, gifting diamond neckless to your girlfriend or your lovely
wife. You see now ?? RIGHT!!!! In todays fast moving and changing world purchasing has become very
important to any of us whether it’s an individual or a Small business or Government or any multi
national organizations having business of billions’.

Now, I think you are getting a little bit idea of what is purchasing? Right!!! As far as definition
“Purchasing is the act of buying the goods and services that a business or organization company needs
to operate and/or manufacture products for achieving its goals.” In layman’s term purchasing is “buying
of goods”. As you can see that it is directly associated with money spend by business or organization. It
is always under Radar.

On an average purchasing department of company spends an estimated 50 to 70 percent of every

revenue dollar on items ranging from raw materials to services. This has drawn a large focus on
purchasing in recent times. Considering the costs that can be saved it is seen as more of strategic
function. Companies are also seeking to improve purchasing processes as a means of improving
customer satisfaction.

Now I think you guy’s got idea about purchasing. The purpose of this blog is to cover all areas of
purchasing. Although seeing the area of subject it is really difficult to cover all aspects of Purchasing. Still
we will try to go step by step and cover maximum topics which can give you fair knowledge and idea of
the subject. Hope this will help you to be more and more confident in you area of work.

Please feel free to ask any queries regarding topic in comment section. I will try to answer the same.
Hi, I hope you liked my previous post.

As you know purchasing touches each and every aspects of our life. It is a very huge topic to cover. Here
we will be discussing about purchasing followed by business and organizations. So it will give you
detailed idea about purchasing. Now as I have explained the purchasing in my previous post. Now we
will look into details of it. As now you know that purchasing is buying of goods, Right? So you must be
thinking “ Yes, that’s Damn easy!!” This looks so easy then; Why it is having so much focus??? Why it is
always under RADAR of top industry management? Why so fuss about it? What do you think??

Here is the answer; Purchasing is a general term that is used to describe whole buying process. This
process consists of many elements & steps. As we are going to study purchasing of business and
organizations. We will go briefly through all steps. There is no thumb rule for purchasing steps. But you
can consider below steps.

1. Determining of requirement.

2. Finding suitable source( Supplier).

3. Placing order & getting material as requirement.

4. Receipt of material.

5. Vendor payment.( Needs co ordination with Finance. In many organizations it is looked by finance
department only.)

The above described steps are general process which can be carried out in many different ways. Each
organization & business follow different methods and ways. They adopts these methods as per business
requirements and their way of working , business structure of organization, culture of organization.

In small companies there might be single department for carrying out whole purchasing process. There
is single department which is generally called as purchase department or materials management
department which carry out all above mentioned steps. It suitable for there business needs considering
their company structure and business.

In multilevel organizations purchasing function or purchasing department will be complex considering

business structure. So these companies implements approach of having specialized departments for
each function. There are separate departments which carries out different steps of purchasing. They
collaborate with each other so that final goal delivered for the benefit of organization.

Be it complex of small organizations purchasing function remains same. So you will be think why then
have different departments? The answer is with different approaches towards purchase shows different
way of executing its process & function. We will go through each and every steps in detail my upcoming
posts.
Till then have nice day, feel free to Please feel free to ask any queries regarding topic in comment
section. I will try to answer the same.

Profile

Hi Folks,

I am Vishal from India. Welcome to my blog. I am writing here about purchasing and procurement
process followed by organizations & business.

I have worked in different manufacturing industries across various products like transformers,
switchboards, Electrical motors, cooling units etc. I like to share my practical knowledge & experience in
the area. I will be very happy if I will be useful to you in any way.

Now you will be thinking that there are tons of material on this topic; Why I am doing this again?
Though there is tons of material on web on this topic but I have seen that it is more kind of theoretical
material and less about practical process & situations. I will try to give practical examples & more about
How things work in industry and what is day to day tasks of Purchase.

I am going to write from basics but if you have any questions regarding any are or aspects of purchase
or need any help for purchasing interviews I will be happy to help.

Looking forward towards our long term relationship.

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