Purchasing Fundamentals

Discover and master the fundamentals of purchasing by understanding your strategic and tactical roles as a purchasing practitioner. Improve your company's bottom-line profitability by learning and implementing key concepts such as negotiation, supplier sourcing and qualification, outsourcing and make-or-buy analysis. Learn the basics of supplier partnerships, capital budgeting and green buying.

In this online course, you will learn how to define internal customer needs, generate purchase requisitions and purchase orders, expedite, trace and receive supplier deliveries, maintain effective purchasing records and create and manage various purchasing budgets. You'll learn about business law, contracts, leasing, Six Sigma and total quality management (TQM). You will also learn how to recruit, select and evaluate purchasing personnel, and learn the importance of business ethics.

What you will learn

• Understand the strategic and tactical roles as a purchasing practitioner
• Learn the basics of supplier partnerships, capital budgeting and green buying
• Learn how to define internal customer needs
• Discover how to generate purchase requisitions and purchase orders
• Learn how to expedite, trace and receive supplier deliveries
• Examine how to maintain effective purchasing records
• Understand how to create and manage various purchasing budgets

How you will benefit

• Discover and master the fundamentals of purchasing
• Learn how to recruit, select and evaluate purchasing personnel who can help you get the job done
• Open the door to new opportunities as a purchasing practitioner

Outline

Contributions of Purchasing

In this first lesson, you'll learn about the various types of professional purchasing certification, including those offered by the Institute for Supply Management (ISM) and the National Institute of Government Purchasing (NIGP). You'll explore the breadth of the purchasing body of knowledge and identify several areas where purchasing provides value to organizations. You'll also discover the significance of buying on a total cost basis and learn how savings you generate for purchased materials and services improve your company's bottom-line profitability.

Organizational Strategy and Purchasing Response

In this lesson, you'll learn how to set a vision and mission statement, and how to develop objectives and strategies. The lesson will also discuss the mechanics of creating purchase requisitions and purchase orders and how to use them effectively. You'll finish up by exploring different conditions that benefit from negotiation and the steps and techniques that contribute to a successful outcome.

Elements of the Purchasing Cycle

All organizations use a purchasing cycle to manage buying activities. To help you effectively manage purchasing activities, this lesson presents a seven step-cycle that begins with need recognition and ends with receipt of delivery. You'll explore the first five steps in depth and see how specifications, branding, and samples are three common methods for defining user needs. You'll also learn about four different forms of competition (monopoly, oligopoly, full competition, and perfect competition) and see how competition affects prices.

The Purchasing Cycle (Conclusion); Make or Buy Analysis; Leasing

In this lesson, you'll conclude your exploration of the purchasing cycle by learning about steps six and seven (perform follow-up and receive the delivery). Then, you'll examine expediting, follow-up, and tracing as methods to enhance on-time deliveries. You'll also learn how purchasing supports the receiving function and discover the underlying concepts of make or buy and leasing.

Supplier Sourcing

As a purchasing professional, you depend on your suppliers. After all, without capable suppliers, it would be very difficult (if not impossible) to meet your organization's needs. For that reason, this lesson will discuss the importance of proper source selection and how to prepare a prospective supplier list. You'll find out how to evaluate each supplier-sourcing element and determine when to conduct a supplier visit.

Green Buying; Purchasing Records; Competitive Bidding

Green buying is an extremely important organizational concept. Firms that use it successfully can achieve internal objectives and also satisfy societal goals. This lesson will discuss the purpose of green buying and review its 3Rs (reduce, reuse, and recycle). To help you locate historical information when you need it, you'll investigate the various types of purchasing records and learn about electronic record keeping and reporting. You'll also learn all about competitive bidding and understand how to use a request for quotation (RFQ) or a request for proposal (RFP).

Business Law, Contracts, and Legal Forms of the Organization

This lesson will discuss important legal matters that purchasing professionals encounter daily. You'll begin by looking at business law and then move on to contracts. You'll learn about the principal-agency relationship and the four major forms of organization (sole proprietorships, general partnerships, limited partnerships, and corporations).

Six Sigma and Total Quality Management; ERP/MRP II

Suppliers rely on manufacturing and quality systems. Purchasing professionals need to know about these systems because their use (successful or unsuccessful) highly influences suppliers' abilities to fill your purchase orders on-time, with quality, and at a desirable price. In this lesson, you'll look at Six Sigma and Total Quality Management (TQM), and identify how these philosophies and methodologies benefit organizations. You'll learn about the elements of a supply chain, Manufacturing Resource Planning (MRP II), and Enterprise Resource Planning (ERP).

Introduction to Budgeting

Purchasing, as a major organizational function, is involved with a number of different types of budgets. These budgets include the purchasing department administration budget (also known as an expense budget), the production materials budget, and the maintenance, repair, and operating (MRO) budget. To use budgets wisely, you need to know how they work, what they are supposed to accomplish, and how they are constructed. In this lesson, you'll discover the primary purposes, advantages, and disadvantages of budgets. The lesson will cover how to select a budget period, review variable budgets, and understand budget variances.

Capital Budgeting

For many organizations, capital expenditures represent the largest disbursement of funds. Purchasing practitioners play a number of roles in capital budgeting, including assisting with requests for capital expenditures, serving on capital budget evaluation committees, and leading teams to acquire capital assets. This lesson will help you effectively participate in those activities. You'll learn the definition of capital budgeting, understand the initiation process for capital request proposals, and examine different justification methods for project proposals.

Supplier Partnerships; Ethics and Organizational Politics

A supplier partnership is a fairly recent type of arrangement. It characterizes a progressive way for sellers and buyers to work together. Supplier partnerships require an extensive amount of preparation and commitment, but the payoff is substantial for firms that succeed. This lesson will discuss the prerequisites and elements of a supplier partnership. You'll also explore ethics and organizational politics and study their effects on purchasing practitioners.

Recruiting, Training, and Evaluating Purchasing Personnel

In the final lesson, you'll discover how to recruit, select, and evaluate purchasing personnel. Then, you'll learn how to implement a performance planning process, including administering performance reviews. Finally, you'll find out why so many people dislike giving performance reviews and get tips on how to make your reviews more meaningful.

Prerequisites:

There are no prerequisites to take this course.