Page 47 - DMGT525_MATERIALS_MANAGEMENT

Materials Management

Notes 1. Responsibilities which belong exclusively to the purchase department:
(a) Selecting the right suppliers.
(b) Obtaining materials at the best price. (Quite often the lowest price need not necessarily
be the best price or the right price.)
(c) Placing purchase orders with the suppliers.
(d) Following up with the suppliers to ensure timely delivery.
(e) Ensuring that the relationship with the suppliers is always cordial.

(f) Enquiring into complaints both from customers and user departments.
(g) Selecting the appropriate managers and staff for the purchasing function. (One of
the prime considerations is integrity of the highest order.)

(h) Imparting training to purchase personnel to improve efficiency.
2. Responsibilities which the purchase department shares with other departments:
(a) Obtaining technical information and advice on materials.
(b) Establishing and developing specifications for materials. (That main object is assuring
that quality is just right – neither too high or nor too low, both of which will affect
cost and profitability.)

(c) Scheduling orders for materials on suppliers and fixing delivery dates for suppliers.
(d) Specifying mode of delivery and transportation.
(e) Inspecting materials received and ensuring that the specifications laid down have
been compiled with.
(f) Accounting of materials purchased, including payment of bills.
(g) Inventory Control.
(h) Receiving, store-keeping and warehousing.

(i) Entering into construction contracts or service contracts or agreement.
(j) Sale of scrap, surplus and salvaging.
(k) Transportation of materials including clearing of goods.
(l) Determining whether to make or buy.

4.3.2 Duties of Purchasing Department

Some important duties of purchasing department are:

1. Finding and Approving Suppliers: In this context the term suppliers refer to those who
supply services. This should be done not only by discussions with representatives and
perusal of catalogues and samples, but also by visiting supplier’s premises. The approval
in the technical aspects of the vendor’s product or services may be the responsibility of the
quality or the design department, but the purchaser should be convinced that the source of
the supply is stable, reliable, and will be able to fulfill the demands made upon it.
2. Purchasing at Least Total Cost: While the quality and quantity of goods or services may
be specified elsewhere, the purchaser must purchase the materials at the most advantageous
terms. He must be prepared to assist in or lead all discussions on under quantities, and

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