Purchasing: Hybrid Organizational Structure
Purchasing and supply management as part of business management
Purchasing and Supply planning is part of the firms general planning mainly because the continuous supply of raw materials, materials , components and services is of strategic importance to the enterprise.
The Organizational structure of the purchasing and supply function should be aimed mainly at linking into the firms overall structure in the most effective way.
Purchasing and supply coordination should be aimed at harmonizing and aligning the activities of the purchasing and supply function with those of the other business functions.
Control is that element of management which ensures that the activities are executed according to plan and within the allowed parameters.
NB. Purchasing and supply planning is the first responsibility of purchasing and supply management. The other management tasks (organization, coordination and control) can only be executed after the planning task has been completed.
Levels of Purchasing and supply planning and objectives:
3 levels:
Highest level – Organizational planning (strategic planning)
Middle management Level – Functional and Tactical Planning
Lowest Level – Operational Planning at the Lowest Level.
All interlinked and all should support each level.
Highest level – Organizational planning (strategic planning)
Overall planning of the enterprise – Long term or strategic planning
*Ensure purchasing requirements at competitive pricing
*develop existing or new suppliers
* keep investment in inventory as low as possible
Middle management Level – Functional and Tactical Planning
Objectives:
*To enter into long term contracts with reliable suppliers of materials
*To put together a project team responsible for developing suppliers
*To study alternative inventory control systems or the flow of materials to and within the enterprise.
Purchasing ahs supply planning at middle management level entails formulating derived objectives,
Purchasing and Supply planning is part of the firms general planning mainly because the continuous supply of raw materials, materials , components and services is of strategic importance to the enterprise.
The Organizational structure of the purchasing and supply function should be aimed mainly at linking into the firms overall structure in the most effective way.
Purchasing and supply coordination should be aimed at harmonizing and aligning the activities of the purchasing and supply function with those of the other business functions.
Control is that element of management which ensures that the activities are executed according to plan and within the allowed parameters.
NB. Purchasing and supply planning is the first responsibility of purchasing and supply management. The other management tasks (organization, coordination and control) can only be executed after the planning task has been completed.
Levels of Purchasing and supply planning and objectives:
3 levels:
Highest level – Organizational planning (strategic planning)
Middle management Level – Functional and Tactical Planning
Lowest Level – Operational Planning at the Lowest Level.
All interlinked and all should support each level.
Highest level – Organizational planning (strategic planning)
Overall planning of the enterprise – Long term or strategic planning
*Ensure purchasing requirements at competitive pricing
*develop existing or new suppliers
* keep investment in inventory as low as possible
Middle management Level – Functional and Tactical Planning
Objectives:
*To enter into long term contracts with reliable suppliers of materials
*To put together a project team responsible for developing suppliers
*To study alternative inventory control systems or the flow of materials to and within the enterprise.
Purchasing ahs supply planning at middle management level entails formulating derived objectives,