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Date Submitted: 09/12/2010 06:06 PM
Purchasing Selection Method and Flowchart
Nidal Elayache
OPS/TM571-Operations Management in Technology
September 06, 2010
Doc. Andrew Carpenter
Purchasing Process Definition
Business Dictionary defined purchasing as Management control point where all significant purchases are monitored for the right authorization of the right item, at the right price, quality, and quantity, from the right supplier at the right terms, and at the right time. Its major objectives are to maintain the quality and value the firm's products, minimize cash tied-up in inventory, maintain the flow of inputs to maintain the flow of outputs, and strengthen the firm's competitive position. Purchasing may also involve development and review of the product specifications, receipt and processing of requisitions, advertising for bids, bid evaluation, award of supply contracts, inspection of good received, and their appropriate storage and release.
Process Monitoring & Measurement
Objective | Indicator | Formula | Frequency | Target |
Improve Purchasing activity and Supplier Management | Percentage of non conform items received | Number of non conform items received / Total items received | Quarterly | ≤10% |
| Percentage of POs delivered late | Number of POs delivered late / Total POs delivered | Quarterly | ≤10% |
| Percentage of POs delivered with missing items | Number of POs delivered with missing items / Total POs delivered | Quarterly | ≤15% |
| Number of new approved suppliers by scope of work | | Quarterly | ≥1 |
Description of the Activity
Purchasing process is initiated whenever a need for purchase of products or services related to projects is identified. This process is not applicable for petty cash use for less than $ 1000; in this case, verbal approved is required by country manager / project manager and invoice is submitted directly to accounting department. A request for purchasing either products or services is identified. The POF prepares...