Purchasing Relationships

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Table of Contents

1)Introduction2
2)The Purchasing Department3
3) The Sales & Marketing Department
3.1) Roles & Responsibilities4
3.2) Sales & Marketing’s Relationship with Purchasing 4
4) The Accounts & Finance Department
4.1) Roles & Responsibilities5
4.2) Accounts & Finance’s Relationship with Purchasing 5
5) The Human Resource Department
5.1) Roles & Responsibilities6
5.2) Human Resource’s Relationship with Purchasing 6
6) The Production Department
6.1) Roles & Responsibilities7
6.2) Production’s Relationship with Purchasing 7
7) The Logistics Department
7.1) Roles & Responsibilities8
7.2) Logistics’ Relationship with Purchasing 8
8) The Information Technology Department
8.1) Roles & Responsibilities9
8.2) Information Technology’s Relationship with Purchasing 9 9)Purchasing’s Relationship with Suppliers10
10)Conclusion11
11) References12

1) Introduction

There are many reasons that contribute to the success of a supply chain. One of them is clearly defined functions of the various departments, and strong inter-department relationships between them. The concept of the value chain was introduced and defined in Michael Porter’s book as a “collection of activities that are performed to design, produce, market, deliver, and support an organization’s products” (Porter, 1985, p. 36). The value chain categorizes the value-adding activities of each department in an organization into primary and support activities as shown in the diagram below:

http://logisticsglobal.blogspot.com/2011/08/analysis-value-chain-porter-model.html

Primary activities include Logistics, Sales & Marketing and Operations, while support activities include Accounts, Human Resource and Purchasing. This report aims to establish the roles and responsibilities of the different departments, and to focus on the relationship of the Purchasing Department with the other departments in an organization. This will aid in the understanding of why integration of the various departments is needed to ensure the continuing success of the business. 2) The Purchasing Department

The Purchasing Department is considered a support activity in the value chain, and provides a service that is the backbone of many manufacturing, retail, military and other industrial organizations. The roles of the Purchasing Department include the buying of all necessary material needed for production or daily operation of the organizations, evaluating whether it is receiving them at the best possible price, handling all paperwork involved with their purchase and delivery, and also ensure it complies with company policies. An essential part of their responsibility is to ensure that materials arrive on time and are of good quality.

http://www.ipo.gov.uk/about/supply/supply-purchasing.htm

3) The Sales & Marketing Department

3.1) Roles & Responsibilities
The roles of the Sales & Marketing Department include the planning and improvement of product sales, the distribution of products, market research and new product testing, and promotion and advertising for products. It is the management process for identifying, anticipating and satisfying customer requirements profitably. The key role of the Department is to attempt to make the company’s products appear more valuable to the end consumer, this makes them the most important part of the supply and demand of the products.

3.2) Sales & Marketing’s Relationship with Purchasing
Traditionally, the Purchasing Department is always concerned about price. However, getting the lowest price is no longer enough. Purchasing now also has to understand how the choices they make create value for their companies. Purchasing helps to define a fair and competitive process, set the parameters for evaluating suppliers, and draft the contracts. Sales & Marketing benefit from this by leveraging on Purchasing’s database of suppliers, in order to find the best fit of suppliers, not just...
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