Efficient Purchasing Process: Purchasing is one of the key departments within an organization’s operations. This is because it’s more likely to affect its profit margins. For every material or inventory supply you source from suppliers, its procurement needs to meet the standards you set. What you receive may ultimately affect the quality of your output; thus, getting it right at the purchasing stage is crucial.

As one of the necessary components of the purchasing process, purchase requisitions form the base for purchase specifications and quality control. Given that it mostly originates from user departments, purchase requisitions (PRs) can assist your purchasing team in maintaining consistent sourcing of inventory and supplier vetting. Furthermore, PRs are integral to ensuring your organization follows some of the best practices during the purchasing process.

Read below to know more about these best practices for an efficient purchasing process.

Embrace Technology

The current business environment involves substantial use of new technologies to help reduce costs, save time, reduce labour intensity, and automate processes. Some of the most recent tech you can take on board are cloud-based procurement tools that digitize procurement activities. These tools can also help ensure that your team members follow the purchasing standard operating procedures (SOPs) you initiate and implement.

Sometimes, human error can cause inflation of costs and delays in honouring invoices from suppliers. But with the right procurement solution, you can greatly reduce such drawbacks. As a result, you can boost your supplier relationship by improving the efficiency of your accounts payable (AP).

Most tech solutions would leave an electronic footprint, which can help audit the process and thus improve accountability.


Practice Inventory Optimization

Continuously ensure that as you put cost control measures in other business areas, you don’t forget the purchasing department. The purchases your team makes should not lead to increased holding costs or frequent emergency purchasing.

You can, for example, have a policy showing periodic automatic replenishment (PAR) levels for non-moving items and reorder quantities for fast-moving items. This can guide the purchasing team and ensure they compare their purchase quantities against policy quantities.

Such a data-driven purchasing solution can ensure you have the right quantity of materials you need at a particular time and avoid over-or understocking.

Ensure You Train The Purchasing Team

The main party to advancing a better procurement process is your procurement team. That’s why you need to keep them in the loop on essentials to good procurement. In addition, they should be able to interpret and practice any SOPs during the purchasing process.

By having a well-trained team, you can easily manage and implement such policies as the cost of ownership. In short, the cost of ownership factors in a product’s cost of storage, handling, and processing. Thus, even if a product is cheap, its storage and handling costs matter to the overall cost of sale for this product. Therefore, training ensures your purchasing team is better informed on such cost implications when sourcing from suppliers.

Maintain Transparency Of The Purchasing Process

Making the procurement process transparent increases accountability reduces chances for fraud, and saves time and costs. Additionally, it can also aid communication with the suppliers, as the purchasing team can track the progress of a purchase order.

Overall, a transparent process means that every stakeholder has access to the information they need to uphold their part in the purchasing chain. This helps reduce the need for back-and-forth emails and phone calls.

Diversify Your Sourcing

During supplier sourcing, make sure you identify and maintain more than one supplier. This way, you don’t put yourself at the mercy of monopolization. This means that if one supplier runs into any difficulties, you have another option and won’t need to stop your operations. Additionally, this gives you ground to make price and quality comparisons.

Efficient Purchasing Process

Create Good Supplier Relationships

As the source of your materials, a courteous relationship with your suppliers can benefit your business. For example, an increase in government taxes can affect the pricing of a product from one of your suppliers. As such, this supplier may consider holding off transferring this cost to you for a certain period.

Additionally, if there’s a potential shortage, a supplier may honour your purchase order over other clients. Furthermore, a supplier you have a good relationship with may likely inform you of special rates or better products you can take advantage of.

Stay Updated On Compliance And Regulations

Ensure your procurement process conforms with industry regulations and compliance at every step. This can help you avoid friction with regulatory authorities. For example, if some products require stamps or radio frequency identification (RFID), use certified suppliers.


To summarize, as a base for gauging your overall costs, you need to ensure you streamline your purchasing process. You can achieve this through current technology, a well-trained purchasing team, good supplier relationship, and transparent procurement process. You should also ensure you stay updated on industry regulations to be compliant and avoid risks of fines and penalties.

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