Purchasing has traditionally involved three main phases each requiring specific documents & considerable transactional activity.

Identification Phase
Notification of the need to buy by;

  • A requisition issued by stores, stock control or potential user
  • A bill of materials issued by the drawing office or production control

Ordering Phase
On receipt the requisition or bill of materials will be checked by the buyer for accuracy, conformity to specifications & purchase records for „rebuy‟ or new buy If standard rebuy & supplier has been meeting expectations, repeat order may be issued.
For a new buy, steps to follow;

  • Enquires or request for quotations (RFQs) – will be send to possible suppliers accompanied by drawings, specifications
  • Quotations will be received in response to the enquires & details of price, quality, delivery, tool costs etc. & terms of business compared
  • When quantities are substantial & quality or delivery of great importance, further negotiations with suppliers will be done – e.g. capacity
  • Purchase order will be issued to the vendor that gave the quotation amended where necessary by subsequent negotiation that was most acceptable. Copies of order will be given to e.g. user department, production control, stores etc.
  • An order acknowledgement should be required from the vendor. Ensure order has been accepted on the terms & conditions defined by the buyer & subsequently agreed between the parties.

Post-ordering Phase

  • It may be necessary to expedite the order to ensure that delivery dates are met
  • An advice note – goods have been dispatched or are ready for collection will be issued by supplier
  • On receipt goods will be checked for quantity and quality by stores & inspection dept. goods received note will be filled & sent to purchasing department.
  • An invoice of the value of goods will be received from supplier. This will be compared with purchase order & goods received note.
  • On completion, the order will be transferred to a completed orders file.

1. No threat to data e.g. Virus
2. Information is readily available i.e no passwords
3. Documentation of future reference e.g. In case of legal claims
4. Simple to learn i.e. no technical skills
5. Reliable in documentation e.g. Not affected by computer breakdowns
6. One on One communication between buyer and supplier can help gauge suppliers reliability.

1. A sequence of non-value adding clerical activities
2. A lot of time is consumed when processing internal and external orders.
3. Numerous costs are incurred in transactionary activities e.g. photocopies, cabinets
4. Human error – forgetting to enter a record
5. Labour intensive e.g. continuous monitoring to ensure to ensure each transaction is accounted for and product appropriately maintained.
6. Excessive documentation e.g. for a new buy you need: requisition, enquiry, quotation, order acknowledgement, advice note, GRN, Invoice

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