A well-structured and well-organised purchasing department begins with a good definition of its missions, its objectives, and the functions (positions) of the employees involved.
Let’s review some general points that will allow you to properly position the Purchasing department of your company.
Missions of the Purchasing Department
In broad terms, a purchasing department’s strategic missions are to:
1. Contribute to increasing financial results.
2. Drive continuous improvement through supplier relationships.
3. Protect the company (managing supply disruptions, disputes, incidents, etc.).
The core of the business consists primarily of satisfying the needs of internal clients, by obtaining the best performance from suppliers (Quality / Cost / Delivery / Services) and by optimizing overall costs.
Objectives of the Purchasing Department
The definition of the objectives of the Purchasing department is obviously done in connection with a strategy (itself linked to a purchasing policy).
Next, these objectives are broken down for each family and/or employee. A purchasing objective, as in management, must be “SMART”:
• Specific (precise),
• Measurable (associated with an indicator),
• Ambitious (involving effort),
• Realistic (achievable),
• Time-bound (planned over time, with monitoring, evaluations, and final validation).
Structure of the Purchasing Department
To establish a purchasing department within your company, you must have identified and formalized the main positions required.
• Director and managers: responsible for management and reporting, possibly including communication, and directly responsible for strategic or critical purchases. The director participates in defining the strategy.
• Buyers: they can belong to three different types:
• Family buyer: in charge of the entire purchasing process for their product family on a site.
• Project buyer: integrated into the Project teams, in charge of coordination with Family buyers, and integrating monitoring and innovation functions.
• Lead Buyer: in charge of purchasing processes by product family but across several sites.
• Quality Manager: manages receiving control and audits. It may belong to the purchasing department or the quality department.
Other positions may be required, though less frequently depending on the sector and industry:
• Supplier Developer: responsible for transferring the client’s best practices and methods to the supplier to improve the overall quality of interactions and the consistency of quality monitoring.
• Purchasing Controller: populates and maintains the purchasing database, monitors price/cost ratios, and prepares reports.
• Purchasing Methods Manager: responsible for the implementation and use of SRM (Supplier Relationship Management) and the purchasing intranet, and leads projects to improve purchasing tools and processes.
These different positions, when they do not fully exist, can be the subject of missions entrusted to one or more buyers or managers.
Finally, the entire purchasing function must be able to benefit from legal support, either external (through close liaison with firms), or internal (through a manager who acts as the legal expert for all contracts and disputes).