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+ Instruction to buy a product or service from their internal customer called a Requisition. + Prepare a Specification listing exactly what is required by way of technical details, quality, colour, delivery date, packaging, etc + Research market to discover possible Suppliers (if not already known). + RFI - Request for information to potential suppliers this is to asses their capability and willingness to supply the product or service. + RFQ - Request for quotation This includes a detailed specification and invites potential Suppliers to send in their offer to supply. Buyers will at this stage request how they will want the charges listed on the quotation, for instance raw material costs, labour costs, manufacturing costs, etc. costed as separate items. + Receive and evaluate quotations, including cost analysis of the broken down costs. Query and sort any ambiguities in the various Supplier's offers. + Prepare shortlist of preferred Suppliers and begin Negotiations (see our key to Negotiation page) on all critical issues such as price, quality, delivery, key performance indicators (KPIs), penalty charges, cost analysis, etc. + Select Supplier. + Issue Purchase Order or Contract to chosen supplier. At this stage the Law comes into play as Purchase orders or Contracts are legal documents, even if they are only verbal agreements to purchase and supply made, say over the telephone. Professionals will therefore always issue these instructions in writing. Purchase Orders cannot have too much detail to cover every eventuality and to ensure that the Supplier clearly understands the Buyer's requirements. They will also usually have the Buyer's standard terms and conditions on the reverse - usually printed in a tiny grey typeface in the hope that nobody will read it! + Purchase Order Confirmation. Suppliers will often issue these back to the Buyer with their own standard terms and conditions on the reverse. This can often become important if their is a subsequent legal dispute because a Court will pay more attention to the last piece of correspondence between the two parties. + Expedite or Progress Chase. Regularly check with Supplier that work is on time. This way the Supplier has no excuse for letting the Buyer down at the last minute. + Goods Receipt. Buyer checks quantity and quality before signing the Supplier's Delivery Note. + Invoice received. Purchase order, Delivery Note and Invoice are checked (but not all by the same person to avoid fiddles) to ensure figures agree before authorising payment to be made. FOR PROCUREMENT PROFESSIONALS - If you work in buying you probably have problems dealing with rogue buying by some amateur members of the organisation. My book explores the subject further and provides practical solutions to solve the problem by marketing & selling the purchasing function properly internally.
You can also buy the book from CIPS (The Chartered Institute of Purchasing & Supply).So shop around to get yourself the best deal. Firstly however you may like to read a sample chapter by going to Google books - Purchasing Performance. Reviews Contents Useful reference links for purchasing professionals
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