The main point in this dialog is that we can have a standard purchasing process
that accommodates different materials and situation.
My name is Americo Cunha, in this lesson, we will be studying the purchasing process.
Welcome, let's start learning.
Here we have a general view of the purchasing process.
Forecast, requirements, requisition, supplier selection, contract, purchase order, receipt,
inspection, payment, and performance measurement.
The cycle begins with the identification of needs.
The needs can be defined during the planning, during a product development, in projects,
or from the production process.
In the production planning, the sales forecast drives the aggregate and material requirement
plan -MRP.
Based on the MRP, it is possible to determine the quantity and dates for raw material, components,
and semi-finished goods needed to meet the production plan.
The requisitioning involves the specification, describing material characteristics, quantity,
and date in which the material is required.
When it involves services, a statement of work should be elaborated to guide the contracting
process.
The business units inform the needs and descriptions through a purchase requisition.
This step involves the tasks for identifying possible suppliers,
and how to evaluate.
The effort dedicated to this task depend on the size and value of the purchase.
Type, size, location, and risks of the supplier are important points to be assessed.
And, also the kind of approach will be used such as bidding, negotiation, or a hybrid
approach.
After supplier selection, the purchasing has to negotiate the contract.
The contract establishes how purchase orders will be issued,
due dates, lead times, prices, times to respond or delivery,
acceptance procedures, payment process, and implications in case the supplier fails
to meet the contract conditions.
When receiving materials, the purchasing department should coordinate
the receiving, inspection and checking procedures such as the 3-way match.
The 3-way-match confirm the information on the Purchase Order (PO),
on the invoice, on receiving report, and make sure that they match.
it confirms that the material ordered,
was delivered and charged correctly.
After receiving, purchasing should authorize the payment
according to contract terms.
Also, purchasing should measure and report the supplier performance periodically.
This was an overview of the purchasing process.
Depend on the type of material or situation, it can have small changes.
Also, one you land in a job, you should find different terms and activity names.
Each company adapts the purchasing process
to fulfill specific needs of their business.
Thanks for watching, see you in the next lesson