In most organizations the buying process is one of the most important activities that the business performs – its responsible for committing company money and facilitating customer satisfaction. For many its as a complex mix of activities however it can be easily boiled down to a series of sequential steps. Whilst purchasing processes vary from organization to organization, (several companies such as Cips.com or supply-chain.org offer advice for tailoring processes to individual industries), there are a series common activities requiring certain documents and controls (authorizations) which are familiar to most businesses.

1/ Identify requirements
Before any purchasing can be undertaken the requirements need to be identified and relayed to the purchaser – this might be in the form of a requisition or a more complex bill of materials – depending on the industry the requirements may be quite detailed.

2/ Identifying suppliers
Once the requisition has been received the purchasing team will set about identifying the suppliers that could be used – this might be from an approved supplier list or there may be a need to research the market if the item has not been previously obtained.

3/ Quotation and selection
Once a potential supplier (or group of suppliers) has been identified a request for quotation is sent out seeking price and availability (lead time) for the item. Once all replies have been received the purchasing department will select the supplier (based on various criteria often cost).

4/ Raise a purchase order
The purchasing department will then raise a purchase order to send to the selected supplier – apart from cost and leadtimes – the purchase order may also quote terms and conditions of supply among other information. In some cases the supplier may confirm receipt of the order by sending an order acknowledgement

5/ Expediting
In some cases the order may be expedited to ensure that delivery dates are met.

6/ Delivery
The supplier will dispatch the goods, these are often received in the organizations warehouse or goods receipt area where they are checked against the purchase order to ensure that the correct items (quantity and quality) have been received.

7/ Issue of goods to end user
Once receipted the goods can be issued to the original requester – an accompanying issue document (often referred to as an issue voucher) may accompany the goods with a signature required to confirm receipt.

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