Purchasing managers, buyers, and purchasing agents make up a key component of a firmís supply chain. They buy the goods and services the company or institution needs to either resell to customers or for the establishmentís own use. Wholesale and retail buyers purchase goods for resale, such as clothing or electronics and purchasing agents buy goods and services for use by their own company or organization such as raw materials for manufacturing or office supplies. Purchasing agents and buyers of farm products purchase goods such as grain, Christmas trees, and tobacco for further processing or resale. Purchasing professionals consider price, quality, availability, reliability, and technical support when choosing suppliers and merchandise. They try to get the best deal for their company, meaning the highest quality goods and services at the lowest possible cost to their companies. In order to accomplish these tasks successfully, purchasing managers, buyers, and purchasing agents study sales records and inventory levels of current stock, identify foreign and domestic suppliers, and keep abreast of changes affecting both the supply of, and demand for, needed products and materials.
In large industrial organizations, a distinction often is drawn between the work of a buyer or purchasing agent and that of a purchasing manager. Purchasing agents commonly focus on routine purchasing tasks, often specializing in a commodity or group of related commodities, such as steel, lumber, cotton, grains, fabricated metal products, or petroleum products. Purchasing agents usually track market conditions, price trends, and futures markets. Purchasing managers usually handle the more complex or critical purchases and may supervise a group of purchasing agents handling other goods and services. Whether a person is titled purchasing manager, buyer, or purchasing agent depends more on specific industry and employer practices than on specific job duties.
Purchasing specialists employed by government agencies or manufacturing firms usually are called purchasing directors, managers, or agents; or contract specialists. These workers acquire materials, parts, machines, supplies, services, and other inputs to the production of a final product. Some purchasing managers specialize in negotiating and supervising supply contracts, and are called contract or supply managers. Purchasing agents and managers obtain items ranging from raw materials, fabricated parts, machinery, and office supplies to construction services and airline tickets. Often, purchasing specialists in government place solicitations for services and accept bids and offers through the Internet. Government purchasing agents and managers must follow strict laws and regulations in their work, in order to avoid any appearance of impropriety. To be effective, purchasing specialists must have a working technical knowledge of the goods or services to be purchased.
Purchasing specialists who buy finished goods for resale are employed by wholesale and retail establishments, where they commonly are known as buyers or merchandise managers. Wholesale and retail buyers are an integral part of a complex system of distribution and merchandising that caters to the vast array of consumer needs and desires. Wholesale buyers purchase goods directly from manufacturers or from other wholesale firms for resale to retail firms, commercial establishments, institutions, and other organizations. In retail firms, buyers purchase goods from wholesale firms or directly from manufacturers for resale to the public. Buyers largely determine which products their establishment will sell. Therefore, it is essential that they have the ability to predict what will appeal to consumers. They must constantly stay informed of the latest trends, because failure to do so could jeopardize profits and the reputation of their company. They keep track of inventories and sales levels through computer software that is linked to the storeís cash registers. Buyers also follow ads in newspapers and other media to check competitorsí sales activities, and they watch general economic conditions to anticipate consumer buying patterns. Buyers working for large and medium-sized firms usually specialize in acquiring one or two lines of merchandise, whereas buyers working for small stores may purchase the establishmentís complete inventory.
The use of private-label merchandise and the consolidation of buying departments have increased the responsibilities of retail buyers. Private-label merchandise, produced for a particular retailer, requires buyers to work closely with vendors to develop and obtain the desired product. The downsizing and consolidation of buying departments increases the demands placed on buyers because, although the amount of work remains unchanged, there are fewer people to accomplish it. The result is an increase in the workloads and levels of responsibility for all.
Many merchandise managers assist in the planning and implementation of sales promotion programs. Working with merchandise executives, they determine the nature of the sale and purchase items accordingly. Merchandise managers may work with advertising personnel to create an ad campaign. For example, they may determine in which media the advertisement will be placednewspapers, direct mail, television, or some combination of all three. In addition, merchandise managers often visit the selling floor to ensure that goods are properly displayed. Buyers stay in constant contact with store and department managers to find out what products are selling well and which items the customers are demanding to be added to the product line. Often, assistant buyers are responsible for placing orders and checking shipments.
Evaluating suppliers is one of the most critical functions of a purchasing manager, buyer, or purchasing agent. Many firms now run on a lean manufacturing schedule and use just-in-time inventories so any delays in the supply chain can shut down production and cost the firm its customers and reputation. Purchasing professionals use many resources to find out all they can about potential suppliers. The Internet has become an effective tool in searching catalogs, trade journals, and industry and company publications, and directories. Purchasing professionals will attend meetings, trade shows, and conferences to learn of new industry trends and make contacts with suppliers. Purchasing managers, agents, and buyers will usually interview prospective suppliers and visit their plants and distribution centers to asses their capabilities. It is important to make certain that the supplier is capable of delivering the desired goods or services on time, in the correct quantities without sacrificing quality. Once all of the necessary information on suppliers is gathered, orders are placed and contracts are awarded to those suppliers who meet the purchaserís needs. Most of the transaction process is now automated using electronic purchasing systems that link the supplier and firms together through the Internet.
Purchasing professionals can gain instant access to the specifications for thousands of commodities, inventory records, and their customersí purchase records to avoid overpaying for goods and to avoid shortages of popular goods or surpluses of goods that do not sell as well. These systems permit faster selection, customization, and ordering of products, and they allow buyers to concentrate on the qualitative and analytical aspects of the job. Long-term contracts are an important strategy of purchasing professionals because it allows purchasers to consolidate their supply bases around fewer suppliers. In todayís global economy purchasing managers, buyers, and purchasing agents should expect to deal with foreign suppliers which may require travel to other countries and to be familiar with other cultures and languages.
Changing business practices have altered the traditional roles of purchasing or supply management specialists in many industries. For example, manufacturing companies increasingly involve workers in this occupation at most stages of product development because of their ability to forecast a partís or materialís cost, availability, and suitability for its intended purpose. Furthermore, potential problems with the supply of materials may be avoided by consulting the purchasing department in the early stages of product design.
Purchasing specialists often work closely with other employees in their own organization when deciding on purchases, an arrangement sometimes called team buying. For example, before submitting an order, they may discuss the design of custom-made products with company design
engineers, talk about problems involving the quality of purchased goods with quality assurance
engineers and production supervisors, or mention shipment problems to managers in the receiving department.