Purchasing and Materials planning

Main job of purchasing personnel is to get materials when needed and pay for them as little as possible considering quality, quantity and other requirements and prices trends. It is the efficiency of the purchasing personnel which makes the real difference on the profit by the industrial unit as well as a commercial unit. Specific technical knowledge cost analysis; value analysis and good judgment go a long way in making a purchasing efficient.

But conservative thinking that purchasing function is an order – placing activity still holds good. The modern thinking is yet to penetrate and wipe off the outside manufacture and hence we have to view it from materials planning point of view. This takes for granted a closer tie between urchasing and other functions. A close liacon between other departments of the organization on
the one hand materials department is a prerequisite for an effective materials planning. For smooth and an interrupted operation of the organization, it is necessary that every – one in the organization should be actively involved in the attainment of the objectives of the organization.

It is this involvement which is important for any effective material planning since all the departments of the organization are somehow or other related to what is required and procured for the efficient running of the whole organization. Here, we are faced with an awesome question: “in view of the wide diversity of responsibility( of the purchasing personnel)…., is it possible to formulate any unified procedure o the basis of which we may determine what is considered to be the escape of the purchasing for materials
planning?” Certainly it is possible. What is required is that we should follow well recognized principles of sound purchasing procedures, which are listed below.

1. The ascertainment of the need,
2. an accurate statement of the character and the quantity of goods desired,
3. The transmission of requisition,
4. Negotiation for possible sources of supply,
5. Analysis of the proposed purchase, selection of Vendors and placing of the supply order,
6. the follow up of the order,
7. The checking got the invoice,
8. The receipt and inspection of goods delivered, and
9. Completion of the records.

For any effective materials planning, it is necessary that purchasing functions should be well – organized and the department should follow well – recognized principles. Materials planning should be such which may enable the materials manager to cope with the demand for materials and as when it comes to him. Materials are basic to profitability. Raw materials, purchased materials
and other supplies are cost centre of the demand for materials planning is done in close cooperation and consultation with the purchasing department is we- equipped with the economies of purchasing. Hence, materials planning may carry meaning and prove result – yielding if purchasing department of the organization is actively associated at all the stages and at all the levels.

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