Purchasing and Supplies Notes

Topics: Supply chain management, Procurement, Supply chain Pages: 15 (4316 words) Published: August 26, 2013
PR)OCUREMENT AND SUPPLY CHAINCourse Outline
This course intends to develop students knowledge of procurement principles. Procedures and Documentation.
Objectives of the course.
At the end of the course, the trainee should be able to-:
i)Demonstrate knowledge of the general principles and procedure of purchasing. ii)Use and produce the documents involved in the purchasing process.
TOPICS
1.Defination and scoop of purchasing.
2.Purchasing procedures.
3. Documents used in purchasing.
4.Purchasing Functions Organizition structure.
5. Purchasing Methods.
6.Inventory / Stock Control.
7. Distribution of Materials (Logistics)
8.ProfessionalBehaviour in Purchasing.
9.IT in Purchasing.
REFERENCES
-Principles of purchasing (A. Salemi)
-Storage and supply of materials (David Jese)
-Purchasing and supplies chain management (Kenneth Lysons) -E Resources.
Examination
-Evaluation
-Work Based Assignment x/15
-C.A.T x/15
-Main Exam x/70
DEFINITION & SCOPE OF PURCHASING
Purchasing and procurement are often regarded as synonymous terms. But procurement is a wider term than purchasing. Purchasing is a process of acquisition of goods or services in return for monetary or equivalent payment. Purchasing is the mostly used term, and it comprehensively means” the function, responsible for obtaining by purchase equipments, materials components and services required by a business for use in production or resale. It involves all the activities from the time and need is identified till the receipts and acceptance of materials purchasing. OBJECTIVES OF PURCHASING

1.To provide an uninterrupted flow of materials in the organization. 2.To ensure that the right amount of stock is maintained in an organization (stock central) 3.To ensure that the materials delivered meets the users specified quality (Through materials inspection) 4.To identify and develop right sources of supply in order to meet purchasing requirements (selecting the right supplies) 5.To ensure that suppliers deliver materials on schedule (within the agreed lead time) 6.To cut reduce on costs in purchasing procedures (Efficiently) Purchasing as a Function

-Purchasing is one of the most importantfunction in any type of a business whether small or large. -It is an integral part of any business activity
-Its importance varies from one organization to the other
i.e. There are those business where purchasing is the core business function e.g. those which are engaged in production. - For service oriented business, purchasing may only take a small part of the management time - Regardless of the amount of purchasing that a business does, it has to be done “right” i.e. properly managed. CLASSES OF BUYER

1.Organizational Buyer- Buyer of goods and services for the Specific purpose of industrial or agricultural production or for use in the operation or conduct of a business institution, profession or service. -They are buyer who buy on behalf of an organization

Examples Of Organizational Buyers
a)Industrial / Producers
b)Intermediate Organizations e.g. wholesalers, Retailers
c)Government/ Public e.g. Motor vehicle, Raw materials services like water, electricity, Drugs e.t.c d)Institutions e.g. Hospital Universities colleges, schools churches, Charitable organizations, NGOs,e.t.c 2.Individual Buyers

-This is buying for individual or family used / Consumption Relationship Between Purchasing and other Business Functions -Purchasing is a business function that relates to all the other business functions -It is a sub – system

-A system is healthy (in balance) when all the subjects – systems work together, to achieve the objectives of the organization. Purchasing as a sub- system work closely with: i)Design and production department

ii)Marketing department
iii)Finance department
The purchasing departments relate with the production departments in the following ways. 1.Preparation of materials...
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