2. Purchasing


Purchasing. Purchasing is a task that all of us do in our daily lives, day in and day out. We don’t even think about it. But for most businesses this is much more complicated. Take for example these boots. There’s leather, there’s stitching, theres rubber that needs to go on them. Those are direct materials.
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There’s also indirect materials which are needed to make the whole manufacturing system run. And finally there are capital goods you need to purchase the land, you need to build the factory, and you need to buy machinery. So all of these different aspects of purchasing are required to run a company. A good purchasing process is hugely important for all of these categories.
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And purchasing, in general, makes up a huge part of companies’ cost. For example, service companies spend up to 40% on purchasing, and manufacturers, this number balloons up to 70%. Nevertheless, a company must be able to manage costs and ensure continuity of their supply of raw materials. If they want to be successful. Purchasing generally refers to the activity of buying goods and services. And in order to have a streamlined process five different phases must be observed. It all starts in phase one with the purchase order. This lets the supplier know that we want the items from them. And they will initiate the sale on their part.
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The next activity is the advance shipping notice. We want to receive an advance shipping notice that helps as when the good day expected to be arrived. We going to monitored through out transit.
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In the third step we are confirming that we received the goods. In the fourth step, we’re processing the invoice. And that then leads us to the fifth step, which means that we’re paying the supplier and we’re closing the purchasing loop.
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Generally, this type of process has to be implemented in the company to be as easy and quick as possible. So what is it that purchasing must accomplish? Well get ready, because I’m going to say the word right twelve times.
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You’re looking to buy the right material, at the right quantity, at the right quality, from the right source, at the right price.
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Of course, these products have to be delivered and they have to be delivered at the right time, to the right location, with the right transportation mode, at the right level of service. And finally, all of this has to be managed with the right contract and the right length of payment terms.

Jim Rohn Sứ mệnh khởi nghiệp