PURCHASING DIFFERENT DIMENSIONS SESSION 4 OF PURCHASING MARKETING

Naeem ASHRAF

Purchasing – Different Dimensions
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Buying Unit Organizational structure

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Interacting in relationship
Strategic choices

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Special Topic

Buying Unit


Purchasing is not a simple process
 Search

– evaluation – ordering  No clear beginning and end  Purchase is affected by past and future decisions  Only BUYERS don’t do purchasing  Many functions and staff are involved

Buying Unit




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Buy center provides a way to make sense of this complexity Buying center is not a formal group but way to classify different roles individuals play Buyers
 Managing

existing suppliers relations  Dealing contractual arrangements  Negotiation about the offering  Administer the order only (sometimes)

Buying Unit


Influencers
 Affect

the choice of suppliers selection  Introduce new suppliers
 Marketing,

Finance, Users, Engg.



Gatekeepers
 Control

the flow of information  More often buyers are the gatekeepers  May prevent access to internal resources

Buying Unit


Deciders
 Specify

choices explicitly – one company only



Each individual/function - different priorities Suppliers’ key account managers
 Specialists



in handling buying unit complexities

Organizational Structure


Centralized
 Coordination

of supplies  Cost savings through large volumes


Decentralized
 Various

business units can make choices



Global purchasing
 Economize

total purchases over the world  E.g. Motorola-65 different agreements globally with same one supplier for the same software license

Interacting in relationships
 

Interdependencies between buyers and suppliers Business relationship – marriage analogy


Both can’t be directed by one participant alone
  

Both gain advantage Both know this can be done with agreement/acceptance Complex mixture of