时间：2022-04-09 12:29:05
Abstract：In the process of SINOPEC exploring the global market and establishing overseas operations, there are lots of primary questions proposed for the management committee to determine. As for Purchasing is an important department and about seventy percent of the total corporate spending will go through the purchasing system. It is necessary to make clear some questions such as how to build the purchasing/supply system; what and how many departments should be included, what position the purchasing department should be in the corporation and what the relationships should be among the purchasing department and other departments and so on. There is also growing interest at the executive level in the purchasing management process and greater recognition of the importance of the purchaser and the material flow process on an organization's ability to achieve its strategic goals and objectives. In this article, we try to find out some answers by researching from the purchasing flow chart and the relationship among the Purchasing Department with Engineering, Legal, Accounting and Quality Control to the position of purchasing in the organization.
Keywords： Logistics Flowchart Purchasing Position Departments’ Relationship
Purchasing’s major objective is to keep the operation going. The key to accomplishing this objective is to ensure there are enough materials available or can be provided immediately. There are two ways to get this goal: one is to build and maintain a large inventory, storing materials as much as possible to accommodate worksite as required, and the other way is to establish an efficient purchasing system with quick reaction, rapid operation and on-time delivery action. Because it will tie up a large amount of funds and sometimes the goods reserved will be depreciated in the warehouse, it is impractical to keep the goods all reserved. It is necessary to research how to establish this purchasing system and how to accomplish the purchasing task by cooperating with the relative departments. This article explores the nature of this system and management requirements for effective and efficient performance.
First let us be clear on the definition of purchasing.
Purchasing constitutes the body of integrated activities that focuses on the procurement of materials, suppliers, and services needed to reach organizational goals.
In a narrow sense, purchasing describes the process of buying. In a broader context, purchasing involves determining the need; selecting the supplier; arriving at the appropriate price, terms, and conditions; issuing the contract or order; and following up to ensure delivery.
The purchasing system is basically a communications process. The fundamental steps in the purchasing process are described below in the Figure.
The steps of purchasing flowchart are:
(1)Recognition of need.
(2)Description of the need, with an accurate statement of the characteristics and amount of the article, commodity, or service desired.
(3)Determination and analysis of possible sources of supply.
(4)Determination of price and terms.
(5)Preparation and placement of the purchase order.
(6)Follow up and/or expediting the order.
(7)Receipt and inspection of goods.
(8)Clearing the invoice and paying the supplier.
(9)Maintenance of records and relationships.
The flowchart in Figure demonstrates one way in which the organization might customize the purchasing process based on different categories of purchasing. Such as material purchasing, service purchasing, project strategic purchasing, emergency purchasing, small value purchasing and so on. We display this flowchart with standard essential steps to determine the status and role of the purchasing department in the organization.
1 Recognition of Need
Need recognition normally comes from one of the using departments, including operation, engineering, marketing, or other functional areas. The purchasing department should know what the requirements of the unit are - what, how much, and when it is needed.
2 Description of Need
No purchaser can be expected to buy without knowing exactly what the internal customers want. For this reason, it is essential to have an accurate description of the need, the article, the commodity, or the service required. If the user/buyer writes unclear or ambiguous descriptions, this will lead to unnecessary expenditures.
In this phase, it is important for purchasing to connect with the originator of the requisition (- here we assume it engineering -) closely.
3 Selection of Possible Sources of Supply
Supplier selection constitutes an important part of the purchasing process and involves the location of qualified sources of supply and assessing the probability that a purchase agreement would result in on-time delivery of satisfactory product and needed services before and after the sale. Approved sources of supply should be selected on the basis of competitive costs, reliability, reputation, and financial strength and stability with sufficient equipment and facilities to produce or furnish the goods. We describe it briefly because we are exploring the relationship of the departments within the organization.
4 Determination of Price and Terms
Analysis of the quotations and the selection of the supplier lead to the placing of an order. Sometimes we can use a simple bid analysis form to assist in analyzing the bids or quotations which include vendor name, description, bid amount, delivery time etc. for the small value purchasing. For big amount or project purchasing, the purchasing department must cooperate with engineering for the analysis. The bid offered by suppliers should be separated with two parts: one is the technical part and the other is the commercial part. Engineering will do the first step to analyze whether the technique or the product is the exact match or better than what they want or less. The bid files which pass the first step will be sent to the purchasing department. Purchasing has the final authority to determine which will be the best suppliers according to the bidding price, delivery time, and other terms and conditions.
5 Preparation of the Purchase Order
The placing of an order usually involves preparation of a purchase order form, unless the supplier's sales agreement is used instead. Failure to use the proper contract form may result in serious legal complications. Furthermore, the transaction may not be properly recorded.
The conditions on the purchase order governing the relations between the buyer and the seller are important, and the question of what should and what should not be included is subject to a good deal.
6 Follow-up and Expediting
After a purchase order has been issued to a supplier, the purchaser may wish to follow up and/or expedite the order. Follow-up is the routine tracking of an order to ensure that the supplier will be able to meet delivery promises. If problems - for example, quality or delivery-are appearing, the buyer needs to know this as soon as possible so that appropriate action can be taken. Expediting is the application of pressure on a supplier to get it to meet the original delivery promise, to deliver ahead of schedule, or to speed up delivery of a delayed order.
7 Receipt and Inspection of Goods
The proper receipt of materials and other items is of vital importance. There should be one receiving department in the organization and receiving is so closely related to purchasing that, always, the receiving department is directly or indirectly responsible to the purchasing department.
In checking the goods received, it sometimes will appear that shortages exist either because material has been lost in transit or because it was short-shipped. The legal department will be involved in case it happens.
8 Clearing the Invoice and Payment
The invoice constitutes a claim against the buyer and needs to be handled with care. Invoices commonly are requested in duplicate. Invoices must show order number and itemized price for each article involved.
In this phase, the purchasing department should cooperate with financial department for the payment.
9 Maintenance of Records and Suppliers
After having gone through the steps described above, all that remains for the completion of any order is to update the records of the supply department.
We also can get some conclusion when we investigate the flowchart carefully. The flowchart recording the purchasing flow describes the relationship of purchasing with the relative departments and the information flowing direction from relative departments to purchasing and from purchasing to other departments.
Engineering. The basic responsibility of engineering is to provide information on what types of materials are needed and the specification of the qualities needed. The acknowledged right of purchasing to challenge specifications usually promotes great efficiency in the organization.
Legal. Because the purchasing function is the major activity authorized to commit the firm to contracts for materials and services, the legal function provides information regarding contracts and procedures.
Accounting. The accounting function supplies information on payments to suppliers, cost studies for make-or-buy decision, and comparison of actual expenditures to budget.
Quality Control and Receiving. Both of these functions provide information which determines if the suppliers have furnished materials of the quality and quantity specified. Such information is essential to the proper performance of the purchasing function in determining when and how much should be paid.
Inventory. This function is to report feedback on the goods arriving and in storage, provide materials to the worksite and available information to purchasing.
Internal Information Flows from Purchasing to the Organization
The major types of information that flow from purchasing to the organization:
Top Management.Purchasing personnel have daily contact with a wide spectrum of the marketplace, and if properly qualified by education, ability, and experience, are in an advantageous position to collect up-to-the-minute information about current market and business conditions. This data, when correlated and refined, can provide top management with information valuable in the operation of the company. When the materials, especially the strategic equipments go into the purchasing system, the purchasing department should be the exclusive department to report the purchasing course.
Worksite. The worksite function depends on purchasing for information about materials, material availability, material delivery lead times, material substitutes, and help in locating sources of supply for production equipment. Worksite also can be aided by purchasing with information about new technology as well as maintenance, repair, and operating supply items.
Engineering. Purchasing has the right to question the description of the material provided by engineering, and contact engineering frequently during the purchasing process to ensure the product supplied is exactly what engineering required.
Legal. The purchasing department furnishes the legal department with much of the information needed for drawing contracts for all types of materials purchased.
Finance and Accounting. Purchasing is in a position to provide the finance and accounting functions with information basic to budget development and administration and determining cash requirements. Purchasing amount will be paid based on the information including agreement, payment application, and quantity/quality inspection from purchasing.
Stores. The determination of an inventory policy for a store's department is dependent on information concerning lead times and availability of materials, price trends, and substitute materials. The purchasing department is the best source of such information.
To summarize, the purchasing department is the soul of the organization and acts as the leader during the purchasing process. The purchasing department is to plan, organize, direct, control, and coordinate the activities of suppliers and relative internal departments involved in the purchasing system.