Purchasing 390961-M-6
Week 2
Purchasing management
There are multiple purchasing process models:
• Decision-making → buying decisions
• Linear →sourcing, to understand a process like the purchasing process
• Strategic → supplier management
• Cyclical → continuous in nature, no specific beginning and end
• Hybrid linear-cyclical → combination of linear and cyclical
Supplier exit is included in only 1 of the 73 identified models. So apparently there is quite some focus
on how to do things, how to get things started, how to manage ongoing processes but much less
attention for how to handle things that go wrong →terminating relationships
See the following linear purchase process (by van Weele):
This model typically focuses on a specific purchase and follows that from beginning to ending→ helps
to understand how organizations buy. Most models are linear in PM (43 out of 73)
• Specification: they have to identify what it is that they need to buy following with proper
description about what it is that they are buying
• Selection: aim to identify the most appropriate suppliers and then to award the contract to
them
• Contracting: drawing up the contract and get it signed
• Ordering: ordering actual materials/goods/components
• Expediting: following up to this order and see when it is actually delivered with the right
quality/quantity at the right location
• Evaluation: evaluate supplier performance
Some people argue that there is one more stage which is if we need to buy at all → make or buy
decision.
How to manage those purchasing process? → purchasing management. See next page the overview
of management the process of van Weele. The whole model can be viewed as a stage-gate process:
you can only move to next stage once the previous stage is completed.
,Potential of the various stage of the purchasing process in terms of cost savings:
While most of us think of cost savings immediately of the contracting phase, you see that in the
selection or specification process a lot more can be saved in costs.
,It is important when you go out in practice to look at what models are used because most of them
will kind of look like those who are represented here.
, Public procurement
Public procurement law prescribes in a formal way how to go about government contracts.
Week 2
Purchasing management
There are multiple purchasing process models:
• Decision-making → buying decisions
• Linear →sourcing, to understand a process like the purchasing process
• Strategic → supplier management
• Cyclical → continuous in nature, no specific beginning and end
• Hybrid linear-cyclical → combination of linear and cyclical
Supplier exit is included in only 1 of the 73 identified models. So apparently there is quite some focus
on how to do things, how to get things started, how to manage ongoing processes but much less
attention for how to handle things that go wrong →terminating relationships
See the following linear purchase process (by van Weele):
This model typically focuses on a specific purchase and follows that from beginning to ending→ helps
to understand how organizations buy. Most models are linear in PM (43 out of 73)
• Specification: they have to identify what it is that they need to buy following with proper
description about what it is that they are buying
• Selection: aim to identify the most appropriate suppliers and then to award the contract to
them
• Contracting: drawing up the contract and get it signed
• Ordering: ordering actual materials/goods/components
• Expediting: following up to this order and see when it is actually delivered with the right
quality/quantity at the right location
• Evaluation: evaluate supplier performance
Some people argue that there is one more stage which is if we need to buy at all → make or buy
decision.
How to manage those purchasing process? → purchasing management. See next page the overview
of management the process of van Weele. The whole model can be viewed as a stage-gate process:
you can only move to next stage once the previous stage is completed.
,Potential of the various stage of the purchasing process in terms of cost savings:
While most of us think of cost savings immediately of the contracting phase, you see that in the
selection or specification process a lot more can be saved in costs.
,It is important when you go out in practice to look at what models are used because most of them
will kind of look like those who are represented here.
, Public procurement
Public procurement law prescribes in a formal way how to go about government contracts.
