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Unit 4. Purchasing and Stocks Area - Coggle Diagram
Unit 4. Purchasing and Stocks Area
4.1. Definition of purchasing market. Product definition
Markets, which in the economic terminology of a market is the area within which the sellers and buyers of a commodity maintain close commercial relations, and carry out abundant transactions in such a way that the different prices at which they are carried out tend to unify.
It comprises all persons, households, companies and institutions that have needs to be satisfied with the products of the suppliers.
Real markets are those that consume these products and potential markets are those that, while not yet consuming them, could do so in the immediate present or in the future.
Markets can be identified and defined in terms of their segments, i.e. specific groups composed of entities with homogeneous characteristics.
The market is everywhere wherever people exchange goods or services for money. In a general economic sense, market is a group of buyers and sellers who are in sufficiently close contact for transactions between any pair of them to affect each other's buying or selling conditions.
Product
Any tangible or intangible item that can be offered to a market for attention, acquisition, use or consumption.
Product quality should also be determined by how customers view the product. From a commercial perspective, quality means the ability of a product to satisfy a customer's needs or requirements.
4.2. Quality, fastening and control standards
Control is the measurement of current and past results in relation to expected results, in order to correct, improve and formulate new plans.
It is essential that in any purchasing department there is a manual that allows us to carry out the purchasing process in order to fulfill the control functions.
The purchasing manual is defined as the official guide of the department, which provides a clear definition of the objectives, structure, procedures, functions, responsibilities, and delegated authority for the fulfillment of the work entrusted.
Common steps that develop around the purchasing department:
Requisition
It is the request made to the supplier about a certain need to satisfy a certain purchase demand.
Quote
It is the establishment of the amount to be paid, form and term of payment for the acquisition of the good or service in question.
Purchase orders or purchase orders
It is the physical document, in writing, which stipulates the quantity and quality required to be delivered by the supplier to the applicant, indicating the appropriate time and place for it, so it would be laughable not to stipulate the conditions of purchase of goods or services.
Receipt of materials
To be accurate in this description, the receiving section, area or department (often called the control desk) should verify that the supplier is delivering precisely what is stipulated in the purchase order with the correct quantity.
Quality control
The quality of the products will always be an important factor. All goods delivered will be reviewed, as well as the valuation of the service offered by the supplier, if applicable; if the goods contain defects, damaged or incomplete characteristics, they will be separated, counted and recorded for subsequent return to the supplier who made the delivery.
Payments
Payment
is the economic remuneration for obtaining the good and/or service from the supplier to the buyer
, either in the form of cash, electronic transfer or any other means that is indirectly the collection of a certain amount of cash, against exhibition of the corresponding invoice.
4.3. Purchasing policy. Inventory management
The objectives of any hotel company with respect to purchasing management can be described in three words: quality, service and price.
We are always looking for the best quality products at the lowest price and also with the best service. It is clear that this is the main condition to give customers what they ask for.
The person responsible for purchasing in general is the Head of Purchasing Management.
For cleaning supplies, for example, the housekeeper is responsible, since she is in charge of these things and knows when and what is needed.
Also when it comes to food (perishable or not), as well as kitchen items (beverages, tableware, etc.), the Head of Purchasing Management makes the decisions and buys the amount he considers convenient, without the need for confirmation from the management.
There are also centralized purchases with respect to amenities. They are customized and therefore ordered once a year by the head office, in large quantities, to achieve a good price.
The aspects to be taken into account in Purchasing Management are:
• The objectives and organization of the hotel.
The price and quality of the products.
The choice of suppliers.
Customer needs.
The criteria for choosing a particular supplier are as follows:
• That the company has a good reputation.
• That there is a good price-quantity ratio.
• That the products have the best quality.
• That the service is in accordance with the needs, i.e. delivery is on time, products are available and the collaboration runs smoothly.
4.4. Role of the purchasing department in a hotel company
Functions of the purchasing department of a hotel company
Establish standards and policies, according to the conditions and needs of the company.
To seek and acquire at the right price, in the required quantity, with the best quality, controlled product, within the shortest possible time, with assured purchasing capacity and availability, and with honest compliance.
Develop and manage purchases.
Be informed of technological changes that may arise in the use of new materials, in order to translate them into cost savings, improved quality of materials or items, improved procurement and distribution services.
The specific objectives of a purchasing department are:
❖ Maintain inventories at the lowest possible level, but enough to satisfactorily feed production needs.
❖ Find and develop sources of supply.
❖ Locate new materials and products.
❖ Ensure good service from suppliers, including prompt delivery and adequate quality of goods.
❖ Maintain an economic operating cost in the purchasing department, which will be balanced with the good results obtained.
❖ Maintain dynamic and constant communication with the company's executives, who directly or indirectly determine what the production programs will be in order to know them and take timely steps to supply their needs.
❖ Cooperate with other departments of the company (sales, human resources, production, accounting, etc.) that request their services.
❖ Obtain quality control approval on new items or items requiring a new supplier. Samples should be obtained from potential suppliers for this purpose.
4.5. Supply and inventory management
Supplies
Indirect cost items consumed in factory operations.
Inventory levels
In inventories we have two types of items:
recyclable and non-recyclable
.
Inventory has been and continues to be the lifeblood of Supply Chains. Properly managed, it generates profits and efficiencies for companies. But as Supply Chains are dynamic, so must be the inventory management policies used.
Traditional inventory management practices have become obsolete due to increasingly global supply chains, shorter product life cycles and multi-channel distribution.
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