A well-defined organizational chart, resources, and functions will help your Purchasing department to be more efficient.
Let’s review some key points that will help improve the organization of your Purchasing department.
Organizational chart of a Purchasing department
There are several key positions within a Purchasing department. The organizational chart below illustrates the importance of identifying key positions and roles. (family buyers and project buyers) and determine the hierarchical and functional links between these stakeholders. The more precisely these actors are identified, with clear roles, missions, and objectives, the more your Purchasing department can bring its full added value.
This organizational chart also shows how important inter-departmental relationships are, and why negotiation skills, both internally and externally, are key competencies for buyers!
Example of an organizational chart for a structured Purchasing department
Purchasing coordination
This coordination role between the different stakeholders is an essential link in the performance of the service.
This coordination could be structured around three priorities:
• to best assist project managers in optimizing and controlling their costs by providing them with procurement optimization solutions,
• to monitor the quality of supplies and disputes, in order to improve productivity,
• Respect the company’s Purchasing policy and achieve the strategic objectives of management in conjunction with the various sites involved.
Purchasing Quality Monitoring: a key mission
This role is at the forefront of monitoring and managing supplier relationships. Indeed, supplier relationships are not always smooth sailing, and it is essential to consistently achieve the best market performance, not only in terms of price, but also quality, adherence to deadlines, and more.
Furthermore, modern quality systems impose a continuous improvement process requiring the implementation of follow-up actions.
Supplier management requires all managerial skills (leadership, empathy, motivation, etc.) without, however, possessing hierarchical levers or business leverage.
Paradoxically, Supplier performance is often determined as much, or even more, internally as externally.
Indeed, the Quality of a product or service This process begins upstream when defining the need and selecting the supplier, but also continues during the usage phase throughout its entire lifespan. It is essential to ensure that the level of quality performance consistently meets expectations.
Purchasing and supply… Who does what?
A common misconception is that buying and supplying These are two identical missions. The Purchasing function within the company covers broader dimensions (managerial, commercial, economic, technical, strategic, regulatory, etc.) but also includes a part related to logistics: management of flows, supply chains, delivery times, stocks, etc.
It is important to clearly separate these tasks, ideally through dedicated departments and personnel. This allows for a sharing of roles and better alignment of objectives. For example, the supply department can place and schedule orders to optimize inventory management, while the purchasing department can negotiate contracts (payment terms, for instance, or secure critical supply chains) and manage supplier accounts and relationships. Resolving logistical incidents is a shared responsibility, with the supply department handling them first and the purchasing department as a second point of contact.
And to whom should the purchasing department report?
Ideally, the Director of the Purchasing Department is part of the company’s management committee and reports directly to senior management. The purchasing department may also sometimes report to the finance department or the logistics department. Obviously, the more there are… Critical or strategic purchases within the company, plus the role of purchasing, the definition of associated policies and strategies will be strategic and of primary importance.
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