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What is Purchasing Management?

By Sheri Cyprus
Updated May 16, 2024
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Purchasing management directs the flow of goods and services in a company and handles all data relating to contact with suppliers. To be effective, it requires knowledge of the supply chain, business and tax laws, invoice and inventory procedures, and transportation and logistics issues. Although a strong knowledge of the products and services to be purchased is essential, professionals in this field must also be able to plan, execute, and oversee purchasing strategies that help their company be more profitable.

Sourcing reliable suppliers is a crucial part of purchasing management. Managers, agents, and buyers usually learn about new products and services from Internet searches, trade shows, and conferences. They meet with potential suppliers in their plants whenever possible. Skills in foreign languages may be helpful for sourcing suppliers in other countries. Individuals who work in this area must always assess potential suppliers in terms of the supplier's ability to deliver quality merchandise at a suitable price and on time.

Purchasing management professionals must be good negotiators, understand technical product information, have good mathematical ability, understand spreadsheet software, understand marketing methodology, and be outstanding decision makers. To get ahead in this field requires good leadership skills, and higher positions often require a master's degree in a business related subject. Entry level positions, such as junior buyers, assistant buyers, and purchasing clerks, often require a college degree and some product knowledge.

Larger distributors may require a bachelor's degree for entry level jobs in this field. Employees typically being their training and learning in sales, then supervision and invoice and stock monitoring. Professional designations include Certified Purchasing Professional (CPP) in the United States, and Certified Professional Purchaser (CPP) in Canada.

Purchasing managers, buyers, and materials managers control budgets, manage staff, and may analyze procurement methods as well as negotiate supplier contracts. These professionals must understand tax laws, purchasing trends, ethics, and global outsourcing issues. Buyers and purchasing agents usually deal specifically with purchasing tasks, while managers usually supervise others, including purchasing agents. Titles and duties vary greatly between industries and employers, however.

Buyers need the ability to select products that consumers will want to buy, so they need to understand trends as well as economic conditions that affect consumer buying decisions. Those employed in small stores may be responsible for purchasing the store's entire inventory, while people working for larger operations may focus on a few product lines.

Merchandise managers may work with an advertising team to create a campaign for the goods they purchase. Follow up is an important part of this job, as responsibility does not end in purchasing goods. For example, managers need to check to be sure the products they buy are being displayed well to attract consumers. Buyers must keep track of customer demands for new products as well as determine how well goods are selling.

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Discussion Comments
By anon43193 — On Aug 26, 2009

what are the weaknesses or threats of purchasing agencies?

By anon31271 — On May 02, 2009

Purchasing management is a useful and effective tool in combating global economic melt down.

Discuss?

By conniewong — On Apr 26, 2007

What is purchasing single or multiple sourcing the 60/40 per cent distribution approach?

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