Organizational Buying Process: Stages and Factors
What Constitutes the Buying Process Within an Organization?
The procurement process within an organization involves specifying its requirements for goods and services, comparing vendors, negotiating with them to agree on terms, holding contracts, and placing orders.
What Affects a Good Purchase?
Good purchasing management affects the quality and safety of service to customers, the cost of materials, and the funding the company gets from its providers as a result of postponing the payment of supplies.
Stages in the Process of Buying
The different stages that make up the circuit of purchases can be summarized into three main groups:
- Beginning of Process:
- Knowledge of the market
- Value the needs and conditions satisfaction
- Preparation of the Buy:
- Request for Proposals and evaluation
- Search and selection of suppliers
- Implementation of the Buy:
- Negotiation and execution of the Purchase
- Delivery and verification of the purchase
- Monitoring of agreements
To meet the market need, gather and analyze information concerning the production, distribution, and sale of a particular material in order to know the purchasing policy to be followed by the company. The sources of information can be found in:
- Internet
- Yellow Pages
- Government agencies
- Chambers of commerce
- Business and professional magazines
- Trade shows
- Overseas markets
- ICEX
The needs assessment is to analyze the information on what to buy. When applying for a job, that is the amount to buy and what price to buy. Companies centralize all purchases through the purchasing department that is receiving the applications through an internal document called “shopping bulletin”, which details the type of material or product that is needed.
The request and its assessment is to request product information or materials that the company wants to buy and to assess key factors in providing such as quality of product, delivery times, prices, supplier location, level of technology, etc.
Search and selection of suppliers: One of the key aspects is the selection of the provider. To discuss your choice, you should analyze the products offered. It will have a positive impact on the company’s competitiveness. To select the suppliers, you should consider features such as satisfactory quality of its products, the lowest price, delivery order at the time hired, back guarantee on defective products or confusion of goods, facilities, technology used, the economic level, reputation, location, etc.
The negotiation and execution of the purchase: At this stage, you should clarify the points that were not specified in the offer or who may be negotiable, such as packaging, delivery date, etc.
The verification and monitoring of purchase: Is to review all the material that has been requested and that the provider has complied with the agreements previously agreed in the negotiations.
How Do I Initiate the Buying Process?
The purchase process begins with the identification of needs by the company and its comparison with the resources at its disposal to address these needs.
How Can Lead to Incorrect Selection of Suppliers?
An incorrect selection of suppliers can lead to increased transport costs, poor quality of purchased products, lack of reliability, non-economic prices, and delay in delivery times, leading to increased costs and even to non-satisfaction.