What are the sub functions of purchasing?
Purchasing is a process through which an organization attempts to acquire goods or services to accomplish the goals of the enterprise.
Different functions involved in purchasing process are as under.
1. Identifying functional requirement and equipments/services that are required to meet functional requirement along with technical specifications for them.
2. Obtaining administrative approval from authority for procuring the material/service, by presenting business case for same.
3. Ensuring availability of financial resource, by way of obtaining financial concurrence and sanctions for required/estimated amount.
4. Identifying probable suppliers for required material/service.
5. Identifying bid evaluation criteria (BEC), before inviting tenders, to ensure, that biases are avoided in purchasing processes. If the value is very high then organisation may decide to go for open tender, inviting tenders by placing advertisement in News Papers or on web sites.
6. The Request for Quotations are prepared and issued to all probable suppliers along with inviting tenders, mentioning all terms and condition of purchase.
7. Receipt of quotations. At specified time and date, as mentioned in tender document, the bids are received.
8. Opening of bids. All bids received in response to the tenders are opened and proper records of all bids received are maintained.
9. Technical suitability of the bids received is judged by technical department.
10. Commercial evaluation of the offers received is carried out to verify commercial suitability.
11. Comparative statement showing technical suitability and financial aspects is prepared, and presented to purchasing authority, for decision as to which bidder order to be placed.
12. Placement of order to lowest technically acceptable bidder.
13. Inspection of material to be procured, to confirm it meets criteria as mentioned in tender.
14. Delivery of material
15. Making payment
16. Closing of purchasing process.
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