8. If the quality of the company’s product is decided by the quality of the input material then this is the area, where the quality begins. So for building quality product it holds importance. The quality of the input material takes the product quality level high. To make the user departments of the organization from time to time aware of the range of the quality of materials available in the market and to maintain right quality of purchased materials based on standards, technical specifications and suitability as determined by the user departments.
9. From the point of view of keeping the production line flowing the purchase activity plays an important role. Uninterrupted production is possible by the proper action by the purchase department.
10. Material inventory of all types is the place where the company’s money is dumped. To maintain the continuity of the supply to ensure that the scheduled activities are not interrupted. Purchase department controls the inventory control activity. The manner in which the inventory is controlled the efficiency of the company depends.
11. 32105602817495 In any organization the purchase department is centrally placed organizationally. It has connections with almost every department in the organization. It integrates the requirements of all departments of the organization. Takes the advantage of economy of scale. Wherever possible avoid duplications of purchases resulting in waste and obsolescence. To achieve maximum integration with other departments of the company. This requires understanding needs of other departments so that these needs can be translated into materials support action. These actions will vary from company to company. However they normally require the purchase department to support another department in one of its major responsibilities. The most common areas of support are in developing favorable reciprocity agreements, effective standardization programmes, forecasts of future prices and general business condition, economic make or buy decisions and a repository of information and knowledge from suppliers regarding new materials, processes and prices.
12. It has connection with outside world of the company through the medium of vendors. It has lot to do in creating the company’s image in the outside world. It has to create for the organization through healthy buyer-supplier relationship.
13. Help the design and development departments to develop new products and related new components of those products.
14. To develop good and continuing vendor relationships. Good vendor relationships are invaluable. Under such relationships number of problems which arise buyer and seller get solved readily. A vendor naturally directs his research, gives advance information on new products and prices, and gives better service to his permanent customers.
15. To train and develop highly competent personnel who are motivated to make the company as well as their department succeed. Such personnel, in addition to fulfilling his responsibilities of the purchasing department, also serve as a reservoir of talent from which future executives of the firm can be selected.
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17. It is based on the principle that job should be organized so as to promote maximum specialization of skills. Total purchasing job is broken up on the basis of specialization, such as follows.
29. This is the document, which initiates the activity of purchasing any matter in the organization. Any person needing some material in the company fills up this form. The initiator gets the component drawing and finds the annual requirements for the item. He calculates the rate for the item if it is not available. If the item is new, the rate for the item has to be calculated. The document has to be authorized before it is released to the purchase department, because it generates inventory in the organization.
32. 26809701169035 After the purchase department receives the purchase request, it gets trigger for further chain of activities. The buyer releases the enquiry to the vendor. There should be generally 3 vendors. All of them should be capable to make the item as per the quality required. Also the vendor should be having capability to invest finance required to generate the goods. In the “enquiry” form it is essential to fill up quality requirements of the item and annual requirements for vendor to understand the business content in the enquiry. The vendor also must know clearly, the name and designation and telephone number of the person to whom he has deal. Many buyers methodically rotate their lists of potential suppliers in requesting quotations.
33. If supplier is high bidder on several quotations, his name in term porarily dropped from the list. Suppliers who already have a substantial amount of the buying company’s business may also be dropped temporarily.
34. Buyer should not request a quotation from supplier with whom he has no intention of doing business. Quotations are expensive to prepare, and it is unethical to ask suppliers to prepare them when they will not get an order regardless of what price the quote. The buyer can do nothing with the supplier’s quotation until engineering department approves or rejects in the purposed change. If the change is approved, he usually will get new quotation from other bidders.
36. 2235835979805 The buyer gets quotation from different vendors. He has his cost estimation ready. He then tabulates the quotations. Find who the lowest quotation vendor is. He also evaluates the credential of the vendors. He then invites top one or two vendors who are eligible for getting order of discussion. He negotiates the price and places order on the party. If there is urgency he gives letter of indent to the party to start the work, before he can give authorized order copy to the vendor. There is very rare case when the order can be placed in good time, which can give “proper lead time” to the vendor to process material. So it is essential to expenditure the matters to place the order.
38. Follow up is the important function in the life of buyer. Also it is highly undervalued and seen as unpleasant. But unfortunately nothing ever gets done unless good follow up is done. Very rare vendor Is found, who supplies material as he promises and as what is discussed and agreed amongst two parties.
39. So the buyer has to have good skills follow up. This activity demands following:
46. The advertisement to be given in minimum three national level. English papers and trade journal, calling for offers.
47. Generally offers are to be placed with earnest money and before a stipulated date, after which it will not be accepted. They are to be filled up on a prescribed tender form.
48. Tender document is available at cost. It contains the terms and conditions .Sufficient time is given to fill the tenders.
49. The tenders are opened publicly on the decided date and the work is awarded to the lowest bidder.
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51. Assembly technology is not complex and does not need costly equipments. So the assembly function is easy to be given out.
55. The secrecy of the technical matters of the products, processes, tools, etc is difficult to maintain. The vendor has to maintain confidentiality.
56. Lot of material has to send to the vendor with high frequency. In the big and developed company there are number of tedious procedures, paper work and legal commitments. This increases work and irritations of the factory people.
59. Make comparative study of the specifications and quotations. The specifications and quotations. The. The manufacturer selling engineer of the manufacturer does lot of the buyer’s drawings. Sometimes the sells person tries to load his efforts on the quotation. It must be kept in picture at every time.
61. Negotiate the price and other details with the vendor. Such as trials, training, approval, testing of the samples made in trial. SPC study case of criticality of the equipment to arrive at Cp, Cpk etc.
62. Place the order to the supplier. Often sells price includes the efforts mentioned above for trials and forwarding. Numbers of other details are to be settled in case of overseas supplier. These have to be done along with the Indian selling agents of that party.
63. In case of imported equipment the import license is to be opened.
64. When the equipment is ready conduct the exercise of trials as mentioned above.