The Relationship between Purchasing Department and other Department Essay Example for Free
Department of Business Studies -Università di Urbino “Carlo Bo” .. function and its relations with other functions, purchasing in particular; the same aspects are. Answer (1 of 4): The purchasing/procurement department and the production department share the relationship of internal customers. The production to each other. No department can work efficiently without the coordination of other. function and its relations with other functions, purchasing in particular; the same aspects and contextual rapport between marketing department, purchasing.
Purchasing has important links with most of the organizational functions.
ACCA AB (F1) Notes: C1a. Accounting & Purchasing Procurement | aCOWtancy Textbook
The Production Planning and Control or Materials Control sections might have a say in the inventory of raw materials and bought out parts; but the purchasing executive has a first hand knowledge of the market situation for the supply of these items. For instance 1 Is there going to be any shortage in the near future?
All such information regarding the outside market is of much importance to the production, marketing, finance and other departments. Increasing the sales does not always result in increasing profit. Sometimes increase in sales may mean a decrease in profits, because with an increase in volume, the cost of input materials may also rise.Keeping it together The Importance of Procurement and Finance collaboration in a cost conscious env
It can apprise the management of what an increase in sales activity will entail. Purchasing is as much in contact with the external market as the sales department is. The sales department may be concerned with the customer market, whereas the purchase department may be looking at the supply market. In fact, both are looking at the external environment and therefore, exchanging of notes between the two departments is important to the organization.
In cases where the Inventory Control or Production Planning and Control PPC departments set certain inventory levels for raw materials, these norms for stocking levels are for average situations.
The normal stocking levels and service levels do not mean much in such situations. Purchasing can also provide valuable information regarding substitutes which may be cheaper and functionally better or at least as good.
Relationship Between Purchasing and Supply and Other Business Functions | omarcafini.info
The purchasing executive may also spot certain extraordinary opportunities to get the raw material at a low cost. Procurement staff can make this process easier by clearly communicating how long it takes to obtain the items being sold.
- Relationship Between Purchasing and Supply and Other Business Functions
Sales staff can in turn make this process easier by promising customers only what is comfortably possible for the procurement department. If you sell furniture and it takes two weeks to obtain the materials for a custom order, it's counterproductive to promise a customer that your company will have an order ready in a week and a half.
Purchasing and Finance The relationship between your purchasing department and finance department requires ongoing feedback in both directions.
Your purchasing department needs to know about the possibilities and constraints that your finance department handles. These include new sources of capital that make it possible to make advantageous inventory purchases and cash flow difficulties that limit purchasing power.
In turn, your finance department needs to know when purchasing and supply is working towards an upcoming expenditure such as a new piece of equipment or a shipment of stock to keep your sales department supplied. Although there may not be bountiful funds available, if there is an opportunity to buy a bulk amount of a key item at an advantageous price, it may be worthwhile for finance to get creative and find the money even if cash is tight.
Similarly, your purchasing department may opt to buy in smaller quantities or stagger orders to coordinate with your financing department's timeline. Purchasing and Production Smooth and timely production depends of having needed parts on hand.
The Relationship between Purchasing Department and other Department Essay
Ordering these parts is the responsibility of the purchasing department. In turn, manufacturing managers are responsible for communicating to purchasing and supply staff about what they need, with enough lead time for purchasing to procure without bringing production to a standstill. This effective communication depends on both purchasing and manufacturing staff knowing how much time it takes to order and receive different parts, and also having clear and current information about which parts are most critical to have on hand and which can be ordered from multiple sources if there is an issue with your primary supplier.