Business
Fact-checked

At SmartCapitalMind, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.

Learn more...

What is Purchasing Management?

Sheri Cyprus
Sheri Cyprus

Purchasing management directs the flow of goods and services in a company and handles all data relating to contact with suppliers. To be effective, it requires knowledge of the supply chain, business and tax laws, invoice and inventory procedures, and transportation and logistics issues. Although a strong knowledge of the products and services to be purchased is essential, professionals in this field must also be able to plan, execute, and oversee purchasing strategies that help their company be more profitable.

Sourcing reliable suppliers is a crucial part of purchasing management. Managers, agents, and buyers usually learn about new products and services from Internet searches, trade shows, and conferences. They meet with potential suppliers in their plants whenever possible. Skills in foreign languages may be helpful for sourcing suppliers in other countries. Individuals who work in this area must always assess potential suppliers in terms of the supplier's ability to deliver quality merchandise at a suitable price and on time.

Purchasing management professionals must be good negotiators.
Purchasing management professionals must be good negotiators.

Purchasing management professionals must be good negotiators, understand technical product information, have good mathematical ability, understand spreadsheet software, understand marketing methodology, and be outstanding decision makers. To get ahead in this field requires good leadership skills, and higher positions often require a master's degree in a business related subject. Entry level positions, such as junior buyers, assistant buyers, and purchasing clerks, often require a college degree and some product knowledge.

The purchasing manager for a department store must track emerging trends in order to match supply with demand.
The purchasing manager for a department store must track emerging trends in order to match supply with demand.

Larger distributors may require a bachelor's degree for entry level jobs in this field. Employees typically being their training and learning in sales, then supervision and invoice and stock monitoring. Professional designations include Certified Purchasing Professional (CPP) in the United States, and Certified Professional Purchaser (CPP) in Canada.

Sourcing reliable suppliers is a crucial part of purchasing management.
Sourcing reliable suppliers is a crucial part of purchasing management.

Purchasing managers, buyers, and materials managers control budgets, manage staff, and may analyze procurement methods as well as negotiate supplier contracts. These professionals must understand tax laws, purchasing trends, ethics, and global outsourcing issues. Buyers and purchasing agents usually deal specifically with purchasing tasks, while managers usually supervise others, including purchasing agents. Titles and duties vary greatly between industries and employers, however.

An automated system may be used to track inventory and produce purchase orders automatically when necessary.
An automated system may be used to track inventory and produce purchase orders automatically when necessary.

Buyers need the ability to select products that consumers will want to buy, so they need to understand trends as well as economic conditions that affect consumer buying decisions. Those employed in small stores may be responsible for purchasing the store's entire inventory, while people working for larger operations may focus on a few product lines.

Managers, agents, and brokers usually learn about new products at trade shows that feature mock-ups or prototypes.
Managers, agents, and brokers usually learn about new products at trade shows that feature mock-ups or prototypes.

Merchandise managers may work with an advertising team to create a campaign for the goods they purchase. Follow up is an important part of this job, as responsibility does not end in purchasing goods. For example, managers need to check to be sure the products they buy are being displayed well to attract consumers. Buyers must keep track of customer demands for new products as well as determine how well goods are selling.

You might also Like

Discussion Comments

anon43193

what are the weaknesses or threats of purchasing agencies?

anon31271

Purchasing management is a useful and effective tool in combating global economic melt down.

Discuss?

conniewong

What is purchasing single or multiple sourcing the 60/40 per cent distribution approach?

Post your comments
Login:
Forgot password?
Register:
    • Purchasing management professionals must be good negotiators.
      By: Scott Griessel
      Purchasing management professionals must be good negotiators.
    • The purchasing manager for a department store must track emerging trends in order to match supply with demand.
      By: Kenishirotie
      The purchasing manager for a department store must track emerging trends in order to match supply with demand.
    • Sourcing reliable suppliers is a crucial part of purchasing management.
      By: Monkey Business
      Sourcing reliable suppliers is a crucial part of purchasing management.
    • An automated system may be used to track inventory and produce purchase orders automatically when necessary.
      By: Monkey Business
      An automated system may be used to track inventory and produce purchase orders automatically when necessary.
    • Managers, agents, and brokers usually learn about new products at trade shows that feature mock-ups or prototypes.
      By: Pavel Losevsky
      Managers, agents, and brokers usually learn about new products at trade shows that feature mock-ups or prototypes.