Lesson 1 – Purchasing management – concepts 101 – Learn main concepts in corporate purchasing

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

2 comments on “Lesson 1 – Purchasing management – concepts 101 – Learn main concepts in corporate purchasing

  1. Watching your videos I landed a Procurement manager career/ job. I may never meet u personally. However, I thank u & recommendation your videos to anyone who is willing to learn.

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