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Purchasing and Vendor Development

The document discusses purchasing and vendor development. It provides an introduction to purchasing, describing it as acquiring goods or services from external sources to achieve business goals. It outlines the objectives of purchasing as acquiring goods at minimum cost, ensuring continuous production flow, developing supply sources, and ensuring quality and timely delivery. The responsibilities of purchasing are also discussed, which include determining order times, maintaining inventory levels, establishing quality standards, and overseeing deliveries. Vendor development involves surveying potential vendors, selecting suppliers, finalizing terms with vendors, and evaluating vendor performance on quality and delivery.

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geeta rolaniya
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227 views

Purchasing and Vendor Development

The document discusses purchasing and vendor development. It provides an introduction to purchasing, describing it as acquiring goods or services from external sources to achieve business goals. It outlines the objectives of purchasing as acquiring goods at minimum cost, ensuring continuous production flow, developing supply sources, and ensuring quality and timely delivery. The responsibilities of purchasing are also discussed, which include determining order times, maintaining inventory levels, establishing quality standards, and overseeing deliveries. Vendor development involves surveying potential vendors, selecting suppliers, finalizing terms with vendors, and evaluating vendor performance on quality and delivery.

Uploaded by

geeta rolaniya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Purchasing and Vendor Development

Presented by :
Content

• Introduction
• Principles, policies,
• procedures and practices
• Objectives, scope, responsibility and
• limitations
Introduction of Purchasing
• Purchasing refers to a business or organization attempting to
acquire goods or services to accomplish the goals of the enterprise.

• All production firms have the need of supplies of materials and


services from external sources. Purchasing function may include the
purchase of raw material, spare parts.

• Purchase is the procurement of goods or services from some external


sources.

• Purchasing is the procurement of the materials, supplies,


machines, tools and operation of a manufacturing plant.
Cont….

• Purchasing is the second important step for a complete operation.


Once the planning of menu is over, we concentrate on purchasing so
that the following steps to be verified for an effective operation.
1. To balance the food cost.
2. Verification of stock for required purchasing.
3. Availability of raw material.
4. Availability of supplier.
5. On time supply.
Objectives of Purchasing:

• To acquire the goods or services at minimum cost.

• To ensure the continuous flow of production.

• To develop the main and attenuate sources of supply.

• To ensure timely delivery.

• To make optimum utilization of capital.

• To acquire quality product so that quality output is served to the


consumer.
Responsibilities of Purchasing

1. Determine when to order. 6. Investigate vendors.

2. Control inventory level. 7. Arrange financial terms.

3. Establish quality standards. 8. Oversee deliveries.

4. Determine / write 9. Handle adjustments.


specifications. 10. Arrange for storage.
5. Obtain competitive bids.
Responsibilities of Purchase Department

• Obtaining prices

• Selecting vendors

• Placing Purchase order

• Settlement of complaints

• Making and maintaining harmonious relations with vendors.


WHAT IS VENDOR 8

» Vendor means a person (or company) who sells and supplies


» An intelligent purchasing involves the rational selection of sources from
which materials can be obtained. Considerable efforts are needed in
identifying, developing and evaluating the prospective suppliers. It is
also essential to continuously appraise the performance of the current
suppliers
VENDOR DEVELOPMENT INVOLVES
9

FOUR STAGES:-
» First Stage survey stage
» Second Stage enquiry stage
» Third Stage negotiation & selection stage
» Fourth Stage experience & evaluation stage
Survey stage-source of information on potential vendors
10

» Survey stage-source of information on potential


vendors Survey involves collecting information on
different suppliers of the desired materials.
Inquiry stage- selection of potential suppliers :
11

» After a list of possible suppliers is complied, the


next step is to inquire a few of them further. It
involves a detailed analysis of supplier’s activities
furnished by vendors or collected by the company.
Negotiation and selection stage- finalization of vendors:
12

» The vendors who are successful in the enquiry


stage may be called for negotiations in order to
discuss business possibilities. During this stage,
various terms namely credit, quantity discount,
quality specifications etc., can be decided. Finally,
a list of approved vendor’s drawn.
Experience and evaluation stage:
13

» At this stage, the buyer evaluates and appraises


the performance of the vendor. The objective is to
improve the performance of vendors in which they
are deficient. The evaluation is done especially on
two counts, namely quality (judged by rejection of
lot- size ) and delivery (judged by delays on
delivery).
Vendor Rating 14

A few ways by which a vendor can be evaluated are


listed below:-
» categorical method
» weighted point method
» cost ratio method
15

THANKS!

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