Purchasing Requirements: How Do your Buyers Know What to Buy?

Some people think that buyers just create purchase orders.  That's certainly true but there's a whole lot more to it because there's so much more that leads up to creating and sending out the PO.

First and foremost is knowing your purchasing requirements.  This really matters because purchase requirements trickle down from the customer, through the bills of material, and down to procurement so that they know what to buy, how much, and when to buy it.  If that is not all working right, then you've got a giant mess.

So how are you dealing with it?  If you think that using lean techniques absolves you of having to know your purchasing requirements, then think again.  Kanbans, for example, have to be sized based on customer demand.  Is the math being done correctly?  Is it being updated on a routine basis?  You can't just set it and forget it.

If you're using MRP material planning, then there is a lot of things needed to ensure that the MRP screen that buyers use to create purchase orders is correct.  If it’s not correct, then what is happening?  Are the buyers saying that the system isn't correct and can’t be believed so they export data into Excel to try and figure what to buy outside of the system?  If that’s the case, then every buyer is basically on their own.

You can’t just rely on buyers figuring out their purchasing requirements, particularly in a complex manufacturing environment.  It is management’s job to make sure that there is a system that supports buyers and makes them successful so that they can properly execute.

Contact us to see how Altemir Consulting can help achieve your operating performance and profitability objectives.