What are the most important risks in the purchasing cycle?

From my small experience, below are the most critical ones: - Not to control the information related to your Purchase Orders in a specific format like Excel then to review it on daily bases, in order to ensure a smooth process for each single order, follow up or case.
- To fail in delivering the required materials on time !! that would stop the company work.
- Not to clear the supplier's invoice on time !! that would delay his money and may cause stopping the further business with him.
- Not to save cost while placing the orders, because if you are only buying without looking to the cost and the gained benefit !! then that is wrong and not a proper procedure of Purchasing.
- Not to communicate properly with other related departments on time (we required) as that would make a big gap which may reflect in a negative way later on.
Regards,

PriceControl,Quality Control, Qty control,And to ensure that, no duplication occurs in the Purchasing Cycle.

Price monitoring

Material Discrepancy

Double Purchase

 

 

1- evaluation of proposals and selection of supplier
2- evaluation of product performance.

Supply and Suppliers 

The purchase cycle commences with definition of requirement and terminates at successful closure of the contract, usually after the warranty period of the product is completed.
So during the whole cycle, the important risk areas are: Designing required specifications;approaching the relevant vendors; placing contract with all important terms and conditions clearly spelled out; ensuring that the material is received in line with the contract; the product goes through requisite tests etc; and suppliers guarantee with regard to performance of the contract is available and alive.

The important risks in the Purchasing cycle  :

Proper selection process of Supplier  ( based on  Capcity , Consistency , Cost , Reliability ) 

Understanding the Lead time cycle - not limiting the lead time of supply to only external . Leadtime to be calculated in2 stages  

Internal Time - PR- PO process time + External Time - PO to GRN time 

Understanding the Financial worth of the supplier is very important so that they are financially stable and in working on sustainability issues to avoid any interuption in supply .

Finally close contact with supplier is very important to ensure smooth replenishement of supply 

 

The delivery of technical goods which has to be ratified by consignee in order to provide Good Receiving Note GRN

Placing the PO argument on this is healthy the absence of consignee is the most risky sign

All should be within the boundaries of budget allocated, time deadlines and quality required.

Your vendor not able to supply your commodity .... lead times ... and pricing. My vendors always forewarned me when pricing went up and therefore I was able to place PO's with larger qty's and different timeframes, similar to a Blanket PO.

I guess, I have had good relation ships with my vendors and I could trust them to work with me to get commodities in house on short notice for the correct price, via fax, phone, email or internet and special deliveries at no extra charge.

Risk in Quality , Payment Terms , Transportation , Re order , Cost , Stock , Currancy , Clearance , new Low , Packing , Expiry