This chapter provides an overview of purchasing and the purchasing process, including the objectives of a world-class purchasing function, purchasing’s span of control, the purchasing cycle, and the documents used to manage the purchasing process. These topics provide the foundation from which to introduce the tools, techniques, and strategies used by purchasing organizations in a competitive market.

This chapter also points out the many different categories of purchases. In addition to buying production material and items, purchasing can be responsible for buying transportation, services, packing supplies, MRO items, capital equipment, and even the corporate jet! There is no one system or approach that applies to all purchase situations. Purchases can vary according to type, importance, impact on quality, time frame for delivery, and dollar volume. We rarely find purchasing personnel who are experts in all the different types of purchases, which is why so many purchasing departments have specialized personnel. These personnel all have one thing in common, however: the opportunity to manage large amounts of resources through the purchasing process. By utilizing eprocurement tools, purchasing can achieve the goals of satisfying user requirements, minimizing non-value-added time, and focusing on deployment of sourcing strategies that can provide tangible value to their enterprise.

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