Purchasing for a company can be very simple or very complex depending on the company and any regulations which may have to be adhered to. However, there are purchasing processes which are consistent across companies regardless of the company's size or regulations to be followed.
Requesting a Purchase
The first process is the request for purchase. Whether needing supplies, services, inventory or new prototypes, there are numerous bits of information that must be provided to order the items. The purchase request is completed by the person needing the item and turned into the purchasing office.
Sourcing the Item
The purchasing office takes all the information from the request and develops a (RFP or RFQ) request for purchase or request for quote. Once these documents are created, they are sent to at least three different vendors, sometimes more, so the vendors can put together a price, availability and estimated lead time. This information is then sent back to the purchasing office.
Purchasing the Item
Once the vendors return the requested information to the purchasing office, the purchasing agent makes the decision on which vendor to actually purchase the item from. Once the vendor has been picked, a purchase order, or PO, is created and sent to the vendor. This document is the vendor's approval to create and ship the item as well as to invoice the company once the product has been shipped.