The central role of a purchasing department is to procure supplies or goods used in the operation of a business. In carrying out this role, its goals include building and maintaining core supplier relationships, getting the best value on goods and coordinating all relevant documentation activities accurately and efficiently.
Building and Maintain Supplier Relationships
Historically, purchasing largely focused on soliciting bids with the goal of getting the lowest costs possible. However, the University of Utah Health Care organization notes in its procurement policies that, as of the time of publication, competitive bidding processes are only used as necessary. Instead, many companies rely on purchasing departments to identify potential suppliers, interact with them and develop trusting relationships with the best providers. This relationship approach strengthens the shared goals of the supplier and buyer and allows for increased flexibility or adaptability when obstacles impede the natural flow of logistics and distribution.
Getting the Best Value on Goods
Closely tied to the focus on maintaining supplier relationships is an objective of getting the best value on goods. "Best value" involves a balance of getting reasonable rates and quality products. A reseller, for instance, needs good prices to make profits, but it also needs high-quality goods to attract buyers. Therefore, the purchasing department needs to compare the price points of different suppliers to the quality of their solutions. The University of Akron points out in its procurement manual that its centralized purchasing department carries this responsibility in managing purchases across all organizational departments.
Coordinating Relevant Documentation
Purchasing processes inherently involve a lot of paperwork and documentation. The University of Utah Health Care organization notes that a role of the purchasing department is to maintain contract files on all active supplier relationships, for instance. Purchasing activities are also connected to accounting in organizations that use enterprise resource software programs, which allow accounting activities to be directly linked to existing purchasing orders and account payments. In some cases, the process is automated. Therefore, accuracy in entering purchasing order and transaction details is as important for a purchasing department as it is for the accounting department.