The Purchasing remit can have a very broad scope

• Ensure availability of all the materials and services needed for the company's day-to-day operation
• Manage the whole Purchasing process, from forecasting and requirements gathering, to contractual agreements
• Liaise with the other business functions including ‘supply’
• Satisfy internal customers’ needs in terms of quality, costs, deadlines and innovation
• Contribute to the company’s overall performance

Purchasing Objectives

• Reduce direct and indirect purchasing costs (direct impact on profit and loss account)
• Ensure supply (no inventory shortage, Vendor Managed Inventory strategy)
• Improve supplier relationship (by complying with payment deadlines and order quantities, etc.)
• Increase productivity of the purchasing administration process
• Supply products and services of appropriate quality (limit the scrap factor and returns rate, avoid exceeding minimum quality specifications )

• Reduce service delivery deadlines for critical items and adapt them for recurring purchases

Purchasing Management System Implementation:

Companies want to establish a purchasing management system for two main reasons:

• Increase in purchasing volumes

Due to the growth in purchasing figures (that represent over 50% of the profit & loss account’s expenses for industrial companies), top management are placing pressure on the purchasing department to contribute to the company’s profitability.

• Increased complexity

Purchasing departments are having to operate in increasingly complex environments (activity diversification, off-shoring to low cost countries, new regulations enforcement, increase in the number of heterogeneous information systems, etc.)

Benefits generated by these management systems sometimes fall short of initial expectations

• Underutilised tools (data quality, user-friendliness, response times, etc.)
• Business needs left unfulfilled (rapidly evolving business needs)

• Too much manual reprocessing to obtain relevant key performance indicators

These mixed results are due to a number of factors

• These purchasing management systems have often been installed as essentially technical projects, without the definition or scoping of business needs
• The work required to ensure data quality is often underestimated (heterogeneous data sources, business users who do not share the same terminology, etc.)
  

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