Purchasing

I. Description

Purchasing is the direct and indirect interaction with suppliers in order to secure a fair and adequate contractual transaction. A purchasing professional must be able to establish and maintain business relationship with suppliers. Within the company, they must be skilled at forming trusting open-door relationships with their clients.

Communication, negotiation, understanding of requirements, contract management, supplier management, corporate policies and procedures and time management are all essential elements for successful acquisition. One also requires varying degrees of knowledge in technology, law and finance.

II. Functions to be performed

1. Define requirements and specifications
2. Develop Statement of Work, contract or License Agreement
3. Determine if product is scalable in case of user growth
4. Determine if escrow account is appropriate
5. Formulate negotiation strategy and establish goals
6. Negotiate complex agreements to align with company business models
7. Leverage competition
8. Make vs. buy analysis
9. Lease vs. buy analysis
10. Liaison between supplier and internal clients
11. Evaluate supplier qualifications
12. Develop, track and manage performance of strategic suppliers
13. Maintain supplier evaluations (past and present performance)
14. Maintain knowledge through routine review of industry literature/trade journals, coursework (pricing, indices, stds…)
15. Contract Administration (track expiration dates, continuous improvement etc.)
16. Create and issue an RFP, RFI or RFQ
17. Cost savings and cost avoidance

III. Skills required

1. Communication with internal users and supplier
2. Negotiation tools and tactics
3. RFQ, RFI and RFP preparation
4. Knowledge of market conditions
5. Broad based technical knowledge
6. Knowledge of licensing types and models
7. Contract understanding: scope, terms and conditions, implementation, etc.
8. Project management
9. Competitive analysis in buy vs. make analysis
10. Ability to analyze financial data
11. Presentation
12. Time management

IV. Instructional topics

1. General understanding of purchasing practices
2. Legal aspects of purchasing
3. Supplier management
4. Contract
5. Project management
6. Cost analysis
7. Uniform Commercial Code