Procurement organization

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The procurement organization is the part of a company that is responsible for keeping the materials ready for production . This includes raw materials , auxiliary materials and supplies . In addition, in some cases the provision of material resources (materials and operating resources), personnel and the necessary finances are referred to as procurement. However, the last two variables are usually assigned to personnel management and financial management .

Organizational forms

Organizationally, a distinction can be made between centralized procurement, i.e. the establishment of a specialized body that is responsible for procurement for all consumers, and decentralized procurement, in which each consumer has its own procurement department.

The advantages of centrally organized procurement lie in the possibility of being able to achieve better payment and delivery conditions through larger order quantities and to reduce the processing costs per order. The position vis-à-vis the suppliers is strengthened by the greater purchasing power. Central procurement is particularly suitable for goods that are required by several users.

On the other hand, central offices lead to higher administrative costs and to a lower overview of the requirements of the individual users. Today, however, a lot can be compensated for with the help of IT : The assignment of the requested material to the individual departments (important for profit centers) is also possible with a central procurement office.

Special forms of procurement organization

A special form of centralization exists when procurement is delegated in whole or in part to external bodies through the formation of purchasing cooperations or the involvement of purchasing commissioners and buying agents.

The establishment of purchasing branches, usually with the intention of eliminating the intermediate trade, is a special form of spatial decentralization.

In principle, there is no optimal procurement organization for a company. Decision-makers can only endeavor to find the most suitable form of organization for their company in order to implement competitive procurement structures and selected supply strategies. These must meet the criteria of economic efficiency and minimizing costs.

Factors to consider:

Principles of procurement

Stock procurement

Relatively large quantities are stored here and are available on demand. The warehouse serves as a buffer.

Advantages:

  • ready to deliver at any time (trading company)
  • no production interruption (production plant)
  • inexpensive purchase in bulk
  • the best time to shop can be awaited

Disadvantage:

  • high capital commitment
  • high interest and storage costs
  • Risk of obsolescence and deterioration in the quality of the stocks

Individual procurement if necessary

In this case, procurement will only take place once the order has been received. It is common for one-off production or often with furniture dealers who only issue samples and only produce the goods when an order is accepted.

Advantages:

  • short storage period!
  • little interest and storage costs
  • low capital commitment

Disadvantage:

  • no immediate readiness for delivery or production

Procurement synchronized with sales or production (" just in time ")

The required goods or materials are delivered as close as possible to their sale or processing (= just in time). The warehouse is limited to low safety stocks. Framework contracts are concluded for large quantities and usually high contractual penalties for non-compliance with the very short call deadlines. This is intended to combine the advantages of stock procurement and individual procurement if necessary. Problems arise with this procurement principle if the demand arises irregularly.

Further topics

Web links

literature

Individual evidence

  1. ^ Bilal Yildiz: Procurement Organization .