Have you bought something that you didn’t like?
And after giving your money and take the product, you realized, I’ve made a wrong decision.
Why do you think it happens?
Let’s try to break down the puzzle of how individuals decide,
choose, and buy things.
And then, trace a parallel with the corporate purchasing.
My name is Americo Cunha, in this lesson, we will be exploring the purchasing context,
purpose, and terminology.
Welcome, let's get start learning.
You’ve learned in the marketing classes that there is a buying process that most consumers
follow.
It starts with the need recognition.
Then, usually, people search for information about products.
They identify alternatives and then make the decision which product they
will buy.
After using the product, they may like it or be frustrated with their choice.
Even educated consumers may regret after buying something.
Can be their own feelings about the product or motivate by opinons from friends and family.
If these things can happen with a simple personal purchasing,
imagine what can happen in a corporate purchasing.
By comparing personal and corporate purchases, we can gain insights about the professional
purchasing work.
What are the differences between personal and corporate purchasing?
In the personal side, it is based on personal needs and desires.
It is your own decision all the way through.
You have a need, have the money, You alone can decide to buy,
choose the product that you like, buy and pay,
take the product with you and use it as you want.
In the other hand, in a company, as a purchasing professional,
you are responsible for fulfilling the needs of other people.
The buying decision is made by a bunch of people,
The payment is handled by some guys, The product transportation, storage and usage
by people the you may not know.
Now let’s explore why corporate purchasing is more complicated and risky
It is mainly because, the needs come from distinct groups and people.
And, worst, these needs can be contradictory.
For instance, operations may want the best equipment,
that could be more expensive, that may be is contrary to the marketing need
to price the product in a competitive range.
To find out the best overall solution for all business units,
the work is coordinated in purchasing process.
If well done the purchasing process can bring several benefits.
(1) Maximize value, promote savings (2) Develop relationships with external partners
that can leverage innovation (3) Acquire components and materials with
high quality (4) Reduce time-to-market
(5) Reduce supply risk and support business continuity
(6) Increase contribution to profits (7) Improve competitive advantage
The purchasing process and procedures intends help purchasing professionals to find the
most suitable solution for the company.
Let’s next check the main activities of the corporate purchasing process.
The needs usually arise from sales forecast and production plan.
Then, there is a very critical step, to identify, sort, and define the requirements that will
be fulfilled by the purchasing.
After, the purchasing department should look for and choose suppliers that can provide
solutions to the requirements.
Also, the purchasing team has to negotiate the technical and commercial terms.
The purchasing is placed, items are received, verified and put available for the company.
After receiving the materials there is lots of work to be done.
Follow up with internal clients about deliveries, quality of the materials, and, if the contract
terms are being followed.
Thanks for watching, see you in the next lesson