purchase materials, products and services from suppliers
a) select materials, products and services considering, for example:
- budget cash flows
- cost
- industry trends
- local conditions
- needs of target market
- products offered by competition
- profitability of carrying products or offering services
- reputation of products and services in area
- storage space available
b) research suppliers:
- refer to sources, for example:
- yellow pages
- industry associations
- peers
- other operators
- determine:
- quality of products and services
- financial background
- reputation
- location
- contact suppliers to determine:
- range of products carried and services offered
- price per item, volume discounts and minimum order
- delivery policy, for example:
- who pays for shipping, e.g. free on board (FOB)
- who pays for insurance
- delivery days
- frequency
- payment policy, for example:
- forms of payment accepted
- volume discounts
- early payment discount
- line of credit available
- support available, for example:
- ease of contact
- convenience of returns
- display materials
- delivery of temperature-sensitive goods
- delivery of emergency orders
c) compare suppliers
d) select best supplier:
- record:
- name of contact person
- mailing address
- telephone and facsimile numbers
- e-mail address, if applicable
e) document purchasing procedures, e.g. purchasing deadline, delivery
schedule
f) communicate procedures to employees responsible for purchasing:
- follow up, e.g. ensure procedures are adhered to
g) order supplies:
- negotiate prices whenever possible, e.g. high volume items may be discounted
h) maintain good relations with suppliers, for example:
- make payments on or before due date:
- contact supplier, if other arrangements are necessary
- contact suppliers regularly to obtain information about:
- new items
- promotions
- recommendations
- provide constructive feedback
- be ethical, e.g. advise supplier of over-shipments
i) monitor supplier's services periodically:
- renegotiate terms, if necessary
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3.2 outline benefits of following inventory procedures
a) controls costs by:
- identifying old or slow-moving stock
- recording use, returns and price changes
- identifying discrepancies, e.g. shrinkage
- reducing overhead, e.g. saves money required for storage space
b) improves security
c) provides basis for purchasing, for example:
- improves ability to project sales
- permits adjustment of capital tied up in inventory
- identifies fast-moving items for reorder
d) provides basis for adjusting pricing:
- identifies:
- increases or decreases in costs
- slow-moving items for pre-season markdown
e) ensures continued production
f) maximizes sales
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3.3 follow procedures for maintaining inventory
a) order merchandise quantities that can be sold in reasonable time frame:
- consider turnover rate of merchandise
- determine minimum and maximum stock levels
b) receive merchandise:
- check for damaged merchandise or packing
c) update system of inventory control, for example:
- inventory sheets
- requisition forms
- bin cards
- inventory book
- point-of-sales systems
d) monitor inventory:
- count inventory according to needs, e.g. monthly, annually
- compare counts to use, e.g. actual sales:
- investigate discrepancies, e.g. shortages, damage
- document discarded items
- analyze slow-moving items, for example:
- mark down or return, if necessary
- document change in price
- rotate items, e.g. use first-in, first-out (FIFO) rotation system
- check dated items before use and take action, if necessary, e.g. put on
special, return for credit, dispose of
e) secure storage areas:
- lock up high cost items and hazardous products
f) ensure proper storage conditions, e.g. temperature, light, humidity,
safety, organization, accessibility, cleanliness
g) reorder products and supplies, as necessary
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3.4 follow receiving procedures
a) compare invoice to purchase order:
- check for price variations
b) check goods received for:
- number of items
- shortages:
- confirm if stock is back-ordered or needs to be reordered
- substitutions
- damage, spoilage or poor quality
c) ensure product identification data is accurate, e.g. accurate part
numbers, material transfer reports (MTR)
d) note irregularities:
- initiate claim with supplier or carrier
e) flag credit notes for follow-up
f) file invoice for payment
g) store stock as required, for example:
- adhere to Workplace Hazardous Material Information System (WHMIS) for
chemicals
h) secure stock
i) record in inventory system |
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