The user just enters the quantity and date needed and submits to warehouse. RFP allows suppliers to propose new material and technology. Electronic Procurement Systems (e-Procurement) Advantages - Time savings - Cost savings - Accuracy - Real time - Mobility - Trackability - Management - Benefits to the suppliers Small value purchasing orders Procurement Credit Card / Corporate Purchasing Card (P-Cards) Blanket or Open-End Purchase Orders Blank Check Purchase Order Stockless Buying or System Contracting Petty Cash Standardization and Simplification of Materials and Components Reasons for Buying or Outsourcing Cost Advantage Insufficient…
Purchase Order When a suitable supplier is found, the buyer issues a Purchase Order (PO) in duplicates to the supplier.
To a large degree, companies now have access to similar resources.
With this comes the realisation that the competitive interface pitches supply chain against supply chain, with purchasing becoming vital due to the impact it can have on a company's bottom line (Heinrich, 2003). The influence of enterprise type on the purchasing decision process. Beyond Partnership: Strategies for innovation and lean supply.
The work of Porter (1980) - specifically his 5 Forces Model of external factors from which a firm's strategy may in part be derived - led to a realisation of the link between some of the key features of this framework and the purchasing function.
Three of these forces - namely, the bargaining power of suppliers, the bargaining power of customers and the threat of new entrants all implicate a linkage with the purchasing role.
This realisation led to a growing awareness of the strategic significance of the function in assisting the organisation gain and sustain competitive advantage.
Kraljic's purchasing portfolio model (1983) categorises purchases with each category requiring a particular approach and yet another approach is required to bring about the relocation of a product/service from one category to another.
In terms of the threat of new entrants, if an organisation does not manage their suppliers well, they may involve themselves in downstream investment - thereby becoming competitors of the firm (Mol, 2003).
Therefore, through the work of Porter and the identification of factors which determine industry profitability, the importance of the purchasing function began to be appreciated. Success factors in strategic supplier alliances: the buying company perspective.