Duties and Responsibilities in Purchasing

The magnitude of duties and responsibilities involved in the purchasing function will depend upon the importance of purchasing in an organisation, its status within the organisation, the amount of authority delegated to the senior manager in charge of the purchasing function and the way and manner in which other related activities in the organisation are delegated.

Based on these factors, the purchasing function may be a senior/top management function, part of the materials management function, a staff function with advisory committee. Based on these analysis, the duties and responsibilities of purchasing function will include:

1. Management Responsibilities
Purchasing department contributes to the determination of organisational strategies, policies and procedures, relating to on affected by purchasing officers involved in purchasing help to plan, organise, direct and control activities in their department along side functions of other departments to achieve organisational objectives.

2. Buying Responsibilities
Procurement responsibilities of purchasers include: negotiating with and selection of suppliers, evaluation of suppliers and their capabilities, placing of orders and contracts, carrying out “supplier development” programmes and where necessary developing conditions of contract depending upon the range of materials and supplies used in business.

3. Expediting Responsibilities
Expediting responsibilities performed by the purchaser include pre-purchase progressing of deliveries to meet target date, post purchase, purchasing of shortages, reviewing the order position on supplies and ensuring continuity of supplies to users.

4. Advisory Responsibilities
The purchasing department’s functions are interdependent and interrelated with other organisational functions such as finance and accounting, quality control, stores, engineering, production, administration and legal, marketing and sales etc. The purchasing clears functional ambiguities and uncertainties with all these departments to be able to accomplish its objectives and overall
objective of the organisation by giving advice to those functions.

5. Clerical Responsibilities:
These include preparation of various documents (e.g local purchase order, request for information, enquiries, contracts, letters etc.) maintenance of records files, catalogues and other reference materials, checking suppliers’ invoices and approving them for payment.

6. Miscellaneous Responsibilities
Other responsibilities performed by the purchasing department includes purchasing research (economic and market studies), transportation and handling of materials and issuance of supplies against properly authorized documentation.

Types of Purchasing Structures and Organisation

Structure refers to the internal arrangement of an organisation.
Purchasing may take place in single plant or multiplant company. The purchasing function may be centralized or decentralized in a multiplant facility. Centralization and decentralization are alternative methods used in designing organisation structures either to retain overall management authority at one point, or alternatively to delegate authority to individual groups to provide more direct action for those groups. The emphasis should always be on where authority can be used to greater effect not simply on geographical location.

Each methods according to Salawu, (1998) has its own advantages, neither is preferable to the other in all situations.

1. Centralized Purchasing Structure

Centralisation of purchasing is a situation where the entire function is made the responsibility of a single department. The department will be held responsible by top management for poor performance of purchasing activities.
This Structure is appropriate in cases whre several business units buy the same prducts, which at the same time are of strategic importance to them.
Board – Corporate purchasing – Corporate Staff
Division A (Production •Marketing /Sales) Division B (Production •Marketing /Sales) Division C (Production •Marketing /Sales)

Advantages of Centralization
a. It ensures uniformity of purchase policy, operation and performance
b. It removes undue waste and duplication of staff and resources
C. It facilitates greater specialisation.
d. It gives room for greater purchasing power, better pricing and bulk buying
e. Better control and management coordination.
f. New methods and procedures can easily be justified.

Disadvantages of centralized buying include:
a. One person/department cannot be an expert in all commodities, it gives no room for variation to take account of the needs of individual department.
b. It may cause delays.
c. Excess paper work is created
d. It often causes antagonism inside the business and increases communication problems gap.

2. Decentralised Purchasing Structure

Decentralization of purchasing occurs when personnel from other functional areas of the organisation e.g production, engineering, sales etc decides on the sources of supply, negotiate with vendors directly, or perform any of the other functions of purchasing concerning orders related to their departments.
Decentralization also occurs when purchasing staff are posted to company’s branch offices and such staff are delegated to purchase goods and services for the respective branches.

Advantages of Decentralized buying
(a) It reduces conflict and unhealthy rivalry between department
(b) It makes for the spreading of the work involved in the purchasing function.
(©) It guarantees purchasing autonomy to individual departments and removes delays.
(d) Better use of local resources (local knowledge of the factory, customers, and suppliers)
(e) Shorter lines of communication.
(f) Reduces transportation cost; may lead to reduction in lead time and shortage costs.

Disadvantage of Decentralized buying
(a) Difficulty of coordination due to diversity in policy
(b) It is very costly because it involves duplication of human and material resources,
(c) Different business Unit may negotiate with same supplier for the same product and as a result arrive at different purchase conditions.

At departmental level the number of people employed, the volume and variety of goods and services purchased, the ability and authority of the departmental head, the capabilities of the people employed in the department, and the importance of the supply function to the operation of the company concerned, are among the factors which will affect the organisation structure decision.
Nevertheless, there are basic organisation patterns around which variation occurs. With the exclusion in some cases of the stock-control function from the buyer’s responsibilities, this pattern is reasonably typical of a small departmental structure,
It should be noted, however, that an organisation chart is but one aspect of the matter. It tells us nothing of the scope of the job the buyer holds, etc., nor does it describe the informal aspects of the organisational activity

3. Centralized /Decentralized Purchasing Structure (Matrix)

These are organisations in which two or more basic types of departmentation are combined e.g. a combination of project and functional structures with one overlaying the other. Unlike in the other types of structure, there is authority and dual information and reporting system. This is a highly differentiated but integrated design.
This type of structure is in general limited to very large International companies, for example Nigerian Breweries PLC., Guiness Nig, PLC., Shell Petroleum Development Company, (SPDC), etc.

Organisation of the Purchasing Department
The internal organisation will depend very greatly on the purchasing policy of the company, but it may consist of functional sections as follows:

(a) Information Section: Keeping of catalogues, market reports, specifications standards, statistics.
(b) Requistion Section: Where all internal requistions are kept showing descriptions of goods required from the market.
(c) Pricing: Where indexes are maintained of all prices paid for goods purchased
(d) Follow-up Section (Progressing): The job of this section is to ensure prompt delivery according to promised delivery dates.
(e) Order Section: This section is responsible for different categories of goods ordered.
(f) Invoice Checking Section: This is a section where invoice are checked for prices, discounts, etc,
(g) General Clerical Section: A section where clerical duties are performed, e.g. mail reception, typing, general filing etc.
(h) Other Section Include: Purchasing research, goods inspection and receiving sections.

Professional and Ethical Behaviour in Purchasing

Ethics is science of conduct either exhibited consciously or in a purposeful manner aimed at achieving an end.
Ethics means judgment of what is good from what is wrong, it means fairness. Sources of ethics for purchasing include: traditional rules, the law of greatest good for greatest number, situation rules and professional codes of conduct.
Code of conduct for any profession lists a range of standard of practice which are measures of “professional” behaviour. The three measures are:

1. Loyalty to the organisation (Professional Conduct)
(a) To serve the best interest of the company
(b) To seek to develop one’s knowledge and competence.
(c) To provide accurate and reliable information
(d) To give fullest cooperation to others
(e) To optimize the use of all resources

2. Justice to all (Relation Conduct)
(a) To act with integrity in his dealings with outside organisations
(b) To act with integrity in his dealings with superiors, equals and subordinates within his own organisation.
(c) Where appropriate to create an environment in which others can act professionally.
(d) To counsel and assist colleagues and subordinates.
(e) To be guided by the wise counsel of others.

3. Faith in profession (Personal Standards)
(a) To seek to maintain ideas without prejudice
(b) To subscribe to truth in all activities
(c) To respect obligations entered into
(d) To avoid sharp practice
(f) To denounce bribery in any form
(e) To comply with the law and professional codes of practice.

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