Why is purchasing very important for a manufacturing organisation?

Purching controling expenses ,minimizing cost,monitering goodness and stock availability all of that and more make purching a very important factor in success.

If we take two skills from procurement than it is nothing but a tedious job and those two skills are:

1. Sourcing

2. Negotiations

Procurement professionals are the one who uses these skills effectively to have maximum benefits for the organization.

Purchasing is very important for manufacturing organisation - so that the true value of MRP can be utilized through the following : 

Taking advantage of Economies of Scale application of EOQ technicques in buying product based on future usuage .

Introduction of Proper selection of supplier with whom we can have continued relationship to ensure smooth replenishment of supplies - for manufacturing production continuity .

Tendering is one of the process -which can be used by procurement to add value to the manufacturing industry due to high volume of procurement , through tendering exercise the procurement is in a postion to add value to the organisation in obtaining the optimum cost of the input materials .

Applying ABC  & PARETO analysis to work out Inventory holding plan and proper replenishment cycles .

Further a measure of supplier selection taking care of the following : Capacity , Consistency in supply , Control over price and cost of the input .and having a steady supply flow 

Recently Purchasing process is becoms is a Vital process in Supply Chain Management. Purchasing process dose not stop till Sourcing & Negotiation its helps the firm or ogranization carry and maintain the day to day activities of the organization and administration.

Since purchase team only have the capacity to handle the company assets for sourcing the material by proper forecsting and understanding the customer demand ...If a purchaser not handle the assest properly means its very diffcult to acheive break even point for the company.

They can increase the sale or profit by proper negotation with supplier for an item, reducing the inventory level, transportation cost by clubbing the items, continuous improvement in procurement etc

You always need to keep your internal customers happy. Production never can stand still on once watch over commodities/RM's. Therefore it is important to check your and monitor your RM's on the system ... inventory on hand and inventory used .... run your daily reports and just incase the system has an error... walk in your manufacturing area and see what is on the floor.

I found that I placed orders more accurately than the system prompting me, especially when an increase in production was planned which a system can not foresee.  

We have to maintain sufficient inventory for our use, and have to calculate estimated duration it will take to deliver inventory by your supplier. If our purchase department is not so sufficient then our stock will end which will result in stoppage of our production units and result in lower production and lower sale which will decrease the profit of the company.

Purchasing is very important in a manufacturing  because purchasing is part of a fishbone process for a business industry, since your a part of a fishbone your a lead importance for a operational process.