Purchasing Strategies: Objectives, Policies, & Stakeholder Analysis

This report delves into the critical aspects of purchasing strategies within facilities management, covering purchasing objectives, policies, and implementation. It examines the objectives discussed in several articles, emphasizing cost minimization and building strong supplier relationships. The report further analyzes purchasing policies, procedures, and strategies such as supplier optimization and risk management, highlighting the importance of stakeholder involvement. It concludes by underscoring the need for clear purchasing policies, efficient strategies, and effective communication among stakeholders to achieve organizational goals and maintain competitive advantage, with the aim of maximizing profit and customer satisfaction.

PURCHASING OBJECTIVES 1
Purchasing objectives:
Name:
Institution:

PURCHASING OBJECTIVES 2
Assessment 1
Purchasing Objectives
Purchasing is defined as a process of buying materials or products of the right standards
from the right supplier at the right time and place (O'brien, 2019). It includes all the necessary
functions involved from the time the purchase is needed until the supplies are received and
approved by the purchasing department1. The Purchasing objectives are the range of activities
that are required in the company to manage the purchasing of goods and services2. This paper
discusses the purchasing objectives that were discussed by various authors in the four articles. It
also points out the most effective purchasing objectives that can be utilized in a company. The
objectives of each article are briefly summarized in the table summary.
Table summary of the four articles
Sources Main thoughts
Article 1 (Reference)
https://www.citeman.com/
5453-objectives-of-
purchasing.html
According to this source, the purchasing objectives should
include the following :
(i) To encourage the continuous flow of supplies to
improve the growth of the company.
(ii) To train and develop imaginative employees
1 Jim, M. (2018). What Are the Objectives of Purchasing Management? Retrieved from
https://bizfluent.com/list-7640453-objectives-purchasing-management.html
2 Monck, R. M., Hadfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and
supply chain management. Engage Learning.

PURCHASING OBJECTIVES 3
Article 2 (Reference)
https://www.bdc.ca/en/articles-
tools/operations/purchasing/
pages/purchasing-department-
objectives.aspx
The main thoughts of this article about purchasing objectives are
as follows:
- To identify effective technology solutions to address
issues in the purchasing department (Purchasing, 2018).
Article 3 (Reference)
https://bizfluent.com/list-
7640453-objectives-
purchasing-management.html
This article suggests that the main purchasing objectives are :
(i) To fulfill business requirements by conducting operation
with the right supplier)3.
(ii) To spend a company`s resources wisely.
Article 4 (Reference)
https:// http://www.mt-
pleasant.org/docs/board/policie
s/purchasing.pdf
According to this article, the main purchase objectives are as
follows :
(i) To conduct business in such a way that potential
suppliers will be satisfied and impressed by the
services.
(ii) To support the competitive purchasing process.
(iii) To discourage and eliminate any procedure that does
not support competitive purchasing.
Overlap (i) The main thoughts of article 1, article 2, article 3, and
article 4 are to minimize the cost of purchases. The
articles expounded that minimization of the input cost
increases the productivity and profitability of the
3 O'brien, J. (2019). Category management in purchasing: a strategic approach to maximize
business profitability. Kegan Page Publishers.

PURCHASING OBJECTIVES 4
business. According to these sources, the objective is
to obtain materials and supplies at a lower cost and
also to choose multiple suppliers who can provide the
best deals in terms of prices4. Moreover, all these
articles also suggest that the main purchasing
objective is to establish and maintain a good
relationship with the suppliers or vendors to help the
company to obtain a favorable image throughout the
business circle.
(ii) Article 2, 3 and 4 advance the idea that the main
purchasing objectives are to spark innovation. The
sources argue that the purchasing department should
support the growth of the company by coming up
with innovative solutions to business opportunities
and problems. Moreover, the sources also indicated
that the main objective is to give due consideration to
quality standards rather than lower price alone.
Article 1, 2, and 4 suggest that the main objectives of
the purchasing are to diversify the supply to improve
bargaining ability and also to lower the cost of
materials.
4 Purchasing (2018). 6 ways the purchasing department can improve your business. Retrieved
from https://www.bdc.ca/en/articles-tools/operations/purchasing/pages/purchasing-department-
objectives.aspx

PURCHASING OBJECTIVES 5
Analysis of different views
Based on the four articles above, the following two purchasing objectives were
mentioned and expounded in all the four sources: (I) to lower the cost of purchasing and (ii) to
establish and maintain a strong relationship with the vendors or supplies. Moreover, the
objectives to spark innovation was indicated and discussed in article 2, 3, and 45. The authors of
three sources also mentioned that the objective is to give due consideration to quality standards.
Furthermore, the objective to diversify the supply to enhance bargaining ability in the business
was identified and discussed in source 1, 2, and 4. However, purchasing objectives such as
spending the company`s resources wisely, supporting competitive purchasing, ensuring a
continuous flow of supplies were rarely mentioned in the articles.
Best purchasing objectives
Based on the above analysis and the research, the best purchasing objectives for my
company include the following: First, to minimize the cost of purchasing to increase productivity
and profitability of the company. By collecting materials and supplies at a lower price allow the
company to generate more profit at a lower cost. Secondly, to establish and maintain a working
relationship with the vendors. This objective will allow my company to gain favorable advantage
throughout the business cycle (Monck, Hadfield, Giunipero, & Patterson, 2015). Treating my
5 Palazzo, Angelo Claudio, Andrea Messori, Bonny Parkinson, and Adam G. Elshaug. "Comment
on:" Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An
International Review"/Authors' Reply to Palazzo and Messori:" Disinvestment and Value-Based
Purchasing Strategies for Pharmaceuticals: An International Review"." PharmacoEconomics 34,
no. 4 (2016): 419.

PURCHASING OBJECTIVES 6
suppliers or vendors with honesty, fairness, trust, and respect enhance longevity in business
relationships. Thirdly, to consider the right quality standards and quantity of purchases to
improve customer satisfaction and loyalty, as well as reducing the risk of faulty goods.
Conclusively, the four articles mentioned the following two purchasing objectives: to
minimize cost and to establish a good relationship with vendors. These objectives seem to be the
most effective ideas that can be utilized in our company to improve the growth of the business.
Moreover, the other identified objectives should also be utilized as well to maximize profit and
customer satisfaction.
Assessment 2
Purchasing policies and procedures
The purchasing policy binds and applies to all managers, employees, suppliers, and directors in
the organization where the purchasing process is involved6. Purchasing entails all the activities
done in procurements which include hiring, leasing service contracts and end of life disposal of
goods which it had been already purchased. Sticking to purchasing the policy is the
responsibility of both the individual and also for the corporate. Any party who will breach the
purchasing policy and procedures will be punished.
Purchasing strategies and their effectiveness
When we hold a meeting with the head of procurement and finance we discuss various
purchasing strategies that our organization needs to implement. The strategies include
 Supplier optimization – the organization will enhance this efficiency by providing the
best prices for the goods.
6 Parkinson, Bonny, and Adam G. Elshaug. "Authors’ reply to Palazzo and Messori:
‘‘Disinvestment and value-based purchasing strategies for pharmaceuticals: an international
review’’." PharmacoEconomics 34, no. 4 (2016): 421-422.

PURCHASING OBJECTIVES 7
 Total quality methods require the vendors to give quality service with reduced errors.
 Management of the risk the company should be able to manage the risks from the
purchasing of the goods.
 Enhancing the global sourcing, this is where the purchase of the product will take place
all over.
 Development of vendor will enhance the good purchasing strategy.
 Green purchasing this purchasing strategy is used by the government to support the need
for purchasing and recycling the products which have negative effects on the
environment.
Various stakeholders
The 3 stakeholders whom we hold meeting together are directors, customers, and suppliers in the
meeting we discuss various purchasing strategies and their efficiency and also we show the
issues that might occur in dealing with purchasing strategy7. One of the main issues discussed is
that the purchasing strategy for it to be fully implemented then it is required that various
stakeholders are involved such stakeholders will be responsible for various undertakings which
are needed in the purchasing of goods and services.
Synopsis
In the assessment 2, there was a lot of finding after conducting various researches about the
purchasing objectives in our organization. It was found that the purchasing policies and
procedures govern various parties inside and outside the organization these individuals include
the managers, directors, employees, and suppliers. This is because these are the people who are
7 Lamenza, Arthur Abreu da Silva, Tharcisio Cotta Fontainha, and Adriana Leiras. "Purchasing
strategies for relief items in humanitarian operations." Journal of Humanitarian Logistics and
Supply Chain Management (2019).

PURCHASING OBJECTIVES 8
greatly involved in the purchasing process. It was found that it is the responsibility of every
individual to make sure that they follow the set policies so that purchasing strategies will be
enhanced in the organization.
In the meeting between the procurement department and the finance
department then it was found that in order for the organization to enhance the purchasing
strategies for the goods then they should be able to provide the best prices for the products. Also,
they should make sure that they provide goods and services to its clients of high-quality8.
Furthermore, during the meeting, it was discussed that for the organization to gain and have good
purchasing strategies then they should be able to manage the risks that could occur during the
purchasing process. it was also found that the organization needs to engage in the global sourcing
that they enhance the purchasing of the products all over the world.
In the meetings between various stakeholders, it was discussed about various issues
relating to purchase strategies and it was found that all the stakeholders should be aware of the
purchasing strategies for goods and services so that they will able to achieve the organization
requirement and meeting the organization purchasing objectives. It was also found that it was
necessary for the organization to form a term which will be responsible for the implementation
of purchasing strategies.
References
Jim, M. (2018).What Are the Objectives of Purchasing Management? Retrieved from
https://bizfluent.com/list-7640453-objectives-purchasing-management.html
8 Wang, Luyao, Hong Fan, and Tianren Gong. "The consumer demand estimating and purchasing
strategies optimizing of FMCG retailers based on geographic methods." Sustainability 10, no. 2
(2018): 466.

PURCHASING OBJECTIVES 9
Monck, R. M., Hadfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and
supply chain management. Engage Learning.
O'brien, J. (2019). Category management in purchasing: a strategic approach to maximize
business profitability. Kegan Page Publishers.
Purchasing (2018). 6 ways the purchasing department can improve your business. Retrieved
from https://www.bdc.ca/en/articles-tools/operations/purchasing/pages/purchasing-department-
objectives.aspx
Palazzo, Angelo Claudio, Andrea Messori, Bonny Parkinson, and Adam G. Elshaug. "Comment
on:" Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An
International Review"/Authors' Reply to Palazzo and Messori:" Disinvestment and Value-Based
Purchasing Strategies for Pharmaceuticals: An International Review"." PharmacoEconomics 34,
no. 4 (2016): 419.
Parkinson, Bonny, and Adam G. Elshaug. "Authors’ reply to Palazzo and Messori:
‘‘Disinvestment and value-based purchasing strategies for pharmaceuticals: an international
review’’." PharmacoEconomics 34, no. 4 (2016): 421-422.
Lamenza, Arthur Abreu da Silva, Tharcisio Cotta Fontainha, and Adriana Leiras. "Purchasing
strategies for relief items in humanitarian operations." Journal of Humanitarian Logistics and
Supply Chain Management (2019).
Wang, Luyao, Hong Fan, and Tianren Gong. "The consumer demand estimating and purchasing
strategies optimizing of FMCG retailers based on geographic methods." Sustainability 10, no. 2
(2018): 466.