Learn how to structure a purchasing department

Understand how a good purchasing department can positively impact your business and what steps to take to structure this sector in your company.

Virtually all companies need to be careful and seek greater efficiency when purchasing raw materials and other items used in their daily operations. After all, without this, it becomes impossible to offer products and services on the market. In this sense, knowing how to structure the purchasing department is essential for the success of any business.

The good work of a purchasing department is capable of ensuring that the company can reduce costs, or prevent production from being halted due to a lack of inputs or late deliveries.

However, enhancing the activities of this sector is not a simple task, requiring good planning to deal with adverse situations and metrics to evaluate suppliers and available products.

In this article, we will show you in more depth the importance of the purchasing department, its main responsibilities and how you can successfully structure it in your business model .

How important is a purchasing department?

If your business model does not yet have a well-structured purchasing department , we must first emphasize the importance of optimizing this sector.

As highlighted previously, the purchasing sector is responsible for acquiring raw materials , supplies and other goods and services that the company and its employees need to carry out their activities.

Therefore, professionals in this area need to carry out several activities during their working day, such as identifying the items that the company needs to buy, finding available options on the market, negotiating better price and term conditions , evaluating the performance of suppliers and being prepared to deal with possible emergency purchases.

How to structure your company's purchasing department

Structuring your business's purchasing department will require resources such as specialized labor and even investments in management software systems.

However, as discussed in the previous topic, structuring yourself in this way can boost your business ’ results . With this in mind, we have divided the following into four topics:

1. Planning

As with any activity, starting with good planning is crucial. First, it is necessary to establish the guidelines and standards that the purchasing department must follow and the responsibilities of each employee in this sector.

Next, it will be necessary to identify the company's needs, such as a list of products and supplies that must be purchased, frequency of purchases and their respective prices.

Finally, you should research the best suppliers available on the market , determining what quantities and delivery times they will be able to meet. You should also check whether the products delivered are of good quality, whether the payment terms are in line with the company's finances, and whether they are capable of making new deliveries in an emergency situation.

2. Supplier management

This step is one of the most complex in the purchasing sector, as it does not depend exclusively on your company to be carried out satisfactorily. Therefore, identifying good suppliers in the market is crucial to success in this area. Supplier management is divided into:

Risk management: involves identifying possible failures throughout the purchasing process, ensuring that in the event of failures, the company's activities will not be deeply affected. Simply put, it involves having an emergency plan for adverse situations.

Supplier qualification: certify that the chosen suppliers have a good reputation in the market and comply with the legislation in force for their area of ​​activity.

Listing and maintenance of approved suppliers: this stage includes monitoring and tracking suppliers.

3. Negotiation

Even if you identify good purchasing options available on the market, it is always possible to use negotiation techniques to improve a supplier's payment conditions and deadlines.

When you can save money or receive orders within a shorter timeframe, your company will be financially healthier and better prepared to deal with emergencies. But be careful that negotiations do not negatively impact the quality of the products delivered or damage your relationship with suppliers.

4. Evaluation

In addition to being able to carry out good planning and obtain good conditions with suppliers, it is necessary to evaluate them to ensure that the quality of the product and the established deadlines are in accordance with what was agreed and with the needs of your company.

At this stage, it is recommended to use metrics and evaluation indicators to know whether your current supply chain is really doing a good job and is capable of driving the growth of your business.