The objectives of a purchasing policy

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To properly manage its supply chain and purchasing management, a company needs to set up a purchasing policy. This consists of defining a set of rules in line with the company’s purchasing strategy and general intentions. To make this concept clearer, let’s take the case of public purchasing. Although governed by the French Public Procurement Code, public bodies, as major economic operators, can adopt their own guidelines. Depending on the strategic axes chosen, such as a sustainable development policy or an ISO standard to be obtained, the objectives are numerous. A purchasing policy is the best way to meet these development objectives. Find out why in this article.

To understand your company’s needs

The first step in creating a purchasing policy is to carry out a clear, detailed analysis of the purchasing process, the supply chain and the company’s needs. Each department needs to be studied, and spending by purchasing families and product categories identified, in order to provide managers with accurate data.

Thanks to the purchasing policy, company managers know the company’s needs in terms of goods, raw materials or services. The management of the production chain, which is often dependent on the supply chain, must be particularly closely scrutinized. The aim of a purchasing policy is to secure the supply chain and guarantee delivery of a range of products or services to customers.

Purchasing policy is therefore transverse and omniscient within the company’s processes. It guarantees their proper execution and performance.

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To improve supplier relations

If your purchasing policy is in place, your requirements in terms of orders or delivery are established in advance. If you opt for environmental criteria or short supply chains, you need to include them in your action plan, and make them available to your employees through appropriate information. Your supplier market will be under control from the outset, and your responsible purchasing policy will be respected by limiting environmental impacts.

So, with a good purchasing policy and a well-established purchasing function, your business relationships with your suppliers will be both optimal and effective. That’s why it’s important to establish alternatives in the event that a supplier doesn’t have the information required for your order. Your supply chain must be secure at all costs, so that you can deliver on time. Thanks to your purchasing strategy, you can anticipate these situations.

The most important thing is toinclude your suppliers in this purchasing policy, and tobe transparent with them. These stakeholders are essential to the running of your business. They are part of your economic development and essential to your purchasing management.

Follow market trends

A well-established purchasing policy enables you to keep abreast of market trends in your sector. Poorly organized purchasing and irregular, time-spaced supply can cause you to miss out on new products or price reductions on the market. A missed opportunity to reduce your costs. Conversely, if the market is sensitive to fluctuations such as the price of raw materials, you’ll need to have the necessary cash on hand to make up the difference between your calculation and the actual purchase price.

The aim of a good purchasing policy is to limit the occurrence of this problem. You’ve set up the right monitoring indicators and are aware of what’s going on. Your suppliers keep you informed, but above all you apply the guidelines defined in your policy. This helps toavoid unforeseen events or uncertain actions that could disrupt your company’s operations.

Ensuring your company’s development

Purchasing policy is an important factor in ensuring your company’s development. It enables it to operate smoothly without suffering supply chain disruptions or the accumulation of dormant goods that force you to sell at a discount. Both of these situations are equally detrimental to your company’s growth.

  • An out-of-stock situation can cost you customers and your reputation. It also jeopardizes your image in the eyes of your customers. However, an out-of-stock situation is perfectly avoidable thanks to an efficient purchasing policy.
  • On the contrary, if you have a large amount of dormant stock in your store, you need to clear it as quickly as possible, firstly to avoid incurring additional costs, and secondly to prevent it from deteriorating.

Don’t have a purchasing policyyet? Set it up as quickly as possible with the help of Weproc, a company specializing in purchasing management. Fine-tune your budgetary policy and turn to responsible purchasing thanks to an efficient, interconnected tool.

 

Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!


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