Purchasing personnel can purchase in a variety of ways. Some common methods include 17 kinds.
1, Purchase Order (Purchase Order): A purchase order is a written contract document prepared by a buyer to describe all the terms and conditions of the purchase. For day-to-day purchases, the most frequently used is a standard purchase order form detailing the requirements for a single or composite item. A multi-part discharge form is generally used to provide a copy of the order to all relevant internal customers.
2. Contract: A contract is a legally enforceable written or oral agreement that defines the work or service that will be performed. Use contracts when the issues are more complex or when the timetable for the agreement exceeds one year.
Letter of Intent: Letters of intent can be used between buyers and suppliers to confirm certain agreements related to future procurement activities. The letter of intent can serve as a temporary purchase order or contract, and it provides instant documents with more prominent protocol features. The letter of intent was a pre-contractual document that was used to reach a preliminary agreement that required further negotiations to develop a decisive contract. The purpose of the letter of intent is to win the agreed time with the supplier before issuing a more complete purchase order or contract.
4. Consignment: Sometimes suppliers are willing to put their inventory in the customer's warehouse. In general, the goods consigned by the supplier to the buyer are paid only when used. This consignment inventory system is a way of sharing inventory and handling costs between purchasing and supplying companies. The supplier bears the funds for the goods, however, the buyer provides storage space and bears the inventory-related expenses plus the transportation fee and the storage fee.
5. Blanket Po: The total order is a fixed agreement with suppliers for certain goods or services at a pre-determined price within a predetermined time or at a price determined under the market or other conditions. Usually more than one year). This approach is designed to reduce the number of small orders, using short-term delivery to meet demand requirements. When the method is applied, the purchasing company places a purchase order with the supplier, indicates the product or service to be purchased, and appropriately measures the cost of the product or service that exists in the unit and other application terms and conditions of the purchase. The purchasing company then issues a material invoice or requisition according to the total purchase order, which specifies the quantity that will be delivered within a certain period of time. Material invoices are generally repetitive and periodic requirements (such as weekly or monthly).
6. Systems contracts: This type of order often involves the purchase of office supplies or the maintenance, repair and operation of items. The outstanding feature of the system contract is a high degree of integration between the buyer and the supplier, resulting in an overall reduction in the total inventory of both parties. The contract itself often authorizes the staff appointed by the purchasing company (usually from the use department) to place orders with suppliers and purchase the specific materials required during the contract period. This is done in the form of a bill of lading, which is usually designed so that the supplier can use it to select stocks and order summaries, as well as through scheduling and delivery instructions.
Only after careful analysis of the study can buyers and suppliers sign such contracts. When the supplier receives the invoice, the supplier must be able to provide a specific quality and quantity of material. Correspondingly, the supplier must have an accurate and detailed use assessment from the buyer before the demand, so the supplier can adjust the output and own purchase plan accordingly to meet the demand. In some publications, this system is often referred to as "zero inventory procurement." In theory, it may become "zero inventory." However, in practice, inventory (and billing) is reduced, but it cannot be without inventory.
7. Phone Ordering or Fax Ordering: For smaller value orders, placing an order by phone, fax, or e-mail may be more appropriate. By reducing the issuance of formal written purchase orders, administrative costs are significantly reduced. For the requisition system using the row number method, the requisition number can be used as the purchase order number. Other systems wholesale the purchase order number from the buyer for order by phone or e-mail. Buyers need to be aware of the Universe Commerce Code's $500 permissible oral goods contract. If the amount exceeds this amount, the law requires that there should be written proof of the contract and that the contract can be executed. This is also the purpose of the Purchase order Confirmation.
8. Electronic ordering system: In this system, the purchaser orders electronically from the supplier. This can be done through computer interconnections, which now include secure Internet links.
9, zero inventory purchase or inventory system: This technology is sometimes referred to as "immediate procurement" and transfers responsibility for on-time delivery to suppliers. Advantages offered to buyers can include reduced inventory investment, reduced warehouse space, better inventory turnover, lower purchase price savings, and simplified text work.
10. Procurement of a Registered Draft or Registered Check: In this method, the ordering document associates the purchase order with a blank check for payment. The supplier fills in the blank cheque, which is limited to a relatively low dollar amount and sends it to the bank for processing. As more and more companies use purchasing cards, this method is gradually being replaced.
11. Petty cash or local micro-procurement: The use of petty cash for small or emergency purchases is another procurement method. As more and more companies use purchasing cards, this method is gradually being replaced.
12. Long-term orders: This type of order generally provides for all terms other than quantity. For shipments for each contract, the supplier delivers the goods within a specified period at a fixed, agreed-upon price. This method of ordering is also referred to as "uncertain ordering," and rail and car carriers are often used to deliver a certain number of cars or trailers each day unless otherwise notified otherwise.
13. Credit Cards or Purchase Cards: The use of credit cards in procurement involves the issuance of credit cards to internal authorized customers, who are able to purchase and pay directly to suppliers.
Function: Purchase cards increase the value of the company through the following methods, including: reducing the number of low-value transactions in purchases and receivables. Reduced procurement cycle. Increased internal customer satisfaction. Reduced total procurement costs. Applicability: This approach is mainly applicable to the procurement of MRO supplies in the internal customer budget based on the contracts or guidelines established by the purchaser. The amount limit will vary with different corporate policies. Benefits: The advantage of procurement cards for purchasing functions is that it reduces the number of purchases that the purchaser has little or no value added to, reduces administrative costs, and reduces the number of procurement cycles. It is also satisfied that internal customers can feel stronger control over their purchases.
Disadvantages: If the purchase card plan is not carefully designed and the needs of the company and internal customers are taken into account, the following problems may arise: The use of the purchase card loses the opportunity to reduce costs that may be caused by the use of a large number of suppliers. Setting a very small single purchase limit may not help many low-value goods. When this plan is introduced but it does not provide enough training, internal customers may not benefit from it.
14. Direct Shipment: For items that calculate demand through the Material Requirements Planning System (MRP system), the expected invoice information can be used as a trigger mechanism. The agreement with the supplier dictates when a specific number of invoices will be issued. For example, the supplier is authorized to ship planned shipments for the next four weeks, and the buyer guarantees a minimum of 90% of the volume for the next four weeks. Whenever updated shipping information is updated, this information is sent to the supplier and the supplier is then responsible for delivering the goods according to the schedule.
15. Vendor Supplement or Vendor Managed Inventory: Vendor Managed Inventory means that the supplier is responsible for maintaining the stock level in the buyer's warehouse, and when the inventory is low, it is timely to replenish the items. The ownership of supplier-managed inventory depends on the agreement between the buyer and the supplier.
16. Basic Ordering Agreements 17. Negotiation: Negotiation is a process of mutual exploration and bargaining between buyers and suppliers. The parties have their own ideas and goals, and they are trying to reach agreements related to all phases of the procurement transaction. Negotiations can be used as a procurement method and as a technique to match other procurement methods.
1, Purchase Order (Purchase Order): A purchase order is a written contract document prepared by a buyer to describe all the terms and conditions of the purchase. For day-to-day purchases, the most frequently used is a standard purchase order form detailing the requirements for a single or composite item. A multi-part discharge form is generally used to provide a copy of the order to all relevant internal customers.
2. Contract: A contract is a legally enforceable written or oral agreement that defines the work or service that will be performed. Use contracts when the issues are more complex or when the timetable for the agreement exceeds one year.
Letter of Intent: Letters of intent can be used between buyers and suppliers to confirm certain agreements related to future procurement activities. The letter of intent can serve as a temporary purchase order or contract, and it provides instant documents with more prominent protocol features. The letter of intent was a pre-contractual document that was used to reach a preliminary agreement that required further negotiations to develop a decisive contract. The purpose of the letter of intent is to win the agreed time with the supplier before issuing a more complete purchase order or contract.
4. Consignment: Sometimes suppliers are willing to put their inventory in the customer's warehouse. In general, the goods consigned by the supplier to the buyer are paid only when used. This consignment inventory system is a way of sharing inventory and handling costs between purchasing and supplying companies. The supplier bears the funds for the goods, however, the buyer provides storage space and bears the inventory-related expenses plus the transportation fee and the storage fee.
5. Blanket Po: The total order is a fixed agreement with suppliers for certain goods or services at a pre-determined price within a predetermined time or at a price determined under the market or other conditions. Usually more than one year). This approach is designed to reduce the number of small orders, using short-term delivery to meet demand requirements. When the method is applied, the purchasing company places a purchase order with the supplier, indicates the product or service to be purchased, and appropriately measures the cost of the product or service that exists in the unit and other application terms and conditions of the purchase. The purchasing company then issues a material invoice or requisition according to the total purchase order, which specifies the quantity that will be delivered within a certain period of time. Material invoices are generally repetitive and periodic requirements (such as weekly or monthly).
6. Systems contracts: This type of order often involves the purchase of office supplies or the maintenance, repair and operation of items. The outstanding feature of the system contract is a high degree of integration between the buyer and the supplier, resulting in an overall reduction in the total inventory of both parties. The contract itself often authorizes the staff appointed by the purchasing company (usually from the use department) to place orders with suppliers and purchase the specific materials required during the contract period. This is done in the form of a bill of lading, which is usually designed so that the supplier can use it to select stocks and order summaries, as well as through scheduling and delivery instructions.
Only after careful analysis of the study can buyers and suppliers sign such contracts. When the supplier receives the invoice, the supplier must be able to provide a specific quality and quantity of material. Correspondingly, the supplier must have an accurate and detailed use assessment from the buyer before the demand, so the supplier can adjust the output and own purchase plan accordingly to meet the demand. In some publications, this system is often referred to as "zero inventory procurement." In theory, it may become "zero inventory." However, in practice, inventory (and billing) is reduced, but it cannot be without inventory.
7. Phone Ordering or Fax Ordering: For smaller value orders, placing an order by phone, fax, or e-mail may be more appropriate. By reducing the issuance of formal written purchase orders, administrative costs are significantly reduced. For the requisition system using the row number method, the requisition number can be used as the purchase order number. Other systems wholesale the purchase order number from the buyer for order by phone or e-mail. Buyers need to be aware of the Universe Commerce Code's $500 permissible oral goods contract. If the amount exceeds this amount, the law requires that there should be written proof of the contract and that the contract can be executed. This is also the purpose of the Purchase order Confirmation.
8. Electronic ordering system: In this system, the purchaser orders electronically from the supplier. This can be done through computer interconnections, which now include secure Internet links.
9, zero inventory purchase or inventory system: This technology is sometimes referred to as "immediate procurement" and transfers responsibility for on-time delivery to suppliers. Advantages offered to buyers can include reduced inventory investment, reduced warehouse space, better inventory turnover, lower purchase price savings, and simplified text work.
10. Procurement of a Registered Draft or Registered Check: In this method, the ordering document associates the purchase order with a blank check for payment. The supplier fills in the blank cheque, which is limited to a relatively low dollar amount and sends it to the bank for processing. As more and more companies use purchasing cards, this method is gradually being replaced.
11. Petty cash or local micro-procurement: The use of petty cash for small or emergency purchases is another procurement method. As more and more companies use purchasing cards, this method is gradually being replaced.
12. Long-term orders: This type of order generally provides for all terms other than quantity. For shipments for each contract, the supplier delivers the goods within a specified period at a fixed, agreed-upon price. This method of ordering is also referred to as "uncertain ordering," and rail and car carriers are often used to deliver a certain number of cars or trailers each day unless otherwise notified otherwise.
13. Credit Cards or Purchase Cards: The use of credit cards in procurement involves the issuance of credit cards to internal authorized customers, who are able to purchase and pay directly to suppliers.
Function: Purchase cards increase the value of the company through the following methods, including: reducing the number of low-value transactions in purchases and receivables. Reduced procurement cycle. Increased internal customer satisfaction. Reduced total procurement costs. Applicability: This approach is mainly applicable to the procurement of MRO supplies in the internal customer budget based on the contracts or guidelines established by the purchaser. The amount limit will vary with different corporate policies. Benefits: The advantage of procurement cards for purchasing functions is that it reduces the number of purchases that the purchaser has little or no value added to, reduces administrative costs, and reduces the number of procurement cycles. It is also satisfied that internal customers can feel stronger control over their purchases.
Disadvantages: If the purchase card plan is not carefully designed and the needs of the company and internal customers are taken into account, the following problems may arise: The use of the purchase card loses the opportunity to reduce costs that may be caused by the use of a large number of suppliers. Setting a very small single purchase limit may not help many low-value goods. When this plan is introduced but it does not provide enough training, internal customers may not benefit from it.
14. Direct Shipment: For items that calculate demand through the Material Requirements Planning System (MRP system), the expected invoice information can be used as a trigger mechanism. The agreement with the supplier dictates when a specific number of invoices will be issued. For example, the supplier is authorized to ship planned shipments for the next four weeks, and the buyer guarantees a minimum of 90% of the volume for the next four weeks. Whenever updated shipping information is updated, this information is sent to the supplier and the supplier is then responsible for delivering the goods according to the schedule.
15. Vendor Supplement or Vendor Managed Inventory: Vendor Managed Inventory means that the supplier is responsible for maintaining the stock level in the buyer's warehouse, and when the inventory is low, it is timely to replenish the items. The ownership of supplier-managed inventory depends on the agreement between the buyer and the supplier.
16. Basic Ordering Agreements 17. Negotiation: Negotiation is a process of mutual exploration and bargaining between buyers and suppliers. The parties have their own ideas and goals, and they are trying to reach agreements related to all phases of the procurement transaction. Negotiations can be used as a procurement method and as a technique to match other procurement methods.