What Are the Purchase Types?

The challenge during the purchasing process is deciding on the supplier that offers the best deal for the products that an organization needs to purchase externally. You may experience possible delays, goods being shipped of lower quality than promised, incomplete orders and many other problems.

There will always be potential risks. You can take advantage of the procurement models developed to minimize these risks and better manage the purchasing process. The control is in the purchasing department or the purchasing authority for purchasing transactions. The procurement specialist should establish and act on a good strategy.

There are three main criteria that are important in purchasing. Quality means due date and cost. It is necessary to progress by recording all stages of the process. Among the purchasing types: operational, strategic, central, coordinated, independent and independent active consultant procedure.

Contains goals and strategies of operational planning (purchasing) business units for a year or less. Strategic purchasing is a type of procurement where all requirements are clearly demonstrated. Potential suppliers are investigated and their historical performance evaluated. The procurement process is also established through contracts in which all conditions are determined.

Purchase Organization Types

The scope of the procurement organization includes the centralized, coordinated, independent and independent active consultancy method known as purchasing organization types. Many variables are effective in purchasing units, which have become the heart of the construction industry. Purchase types will vary depending on each organization.

Central Purchasing

For centralized purchasing, all purchasing activities are centrally managed. These organizations are created for multiple projects, helping to recruit under better conditions.

Coordinated Procurement

Though the central purchasing organization offers many advantages, it lacks many advantages. A coordinated purchase is required to fill these gaps. This type is carried out by procurement agents.

Independent Procurement

It is a more independent type of purchase. Carried out by the owners of the project. Document submission, approval and other procedures are minimal in this type.

Regional Purchasing

This is the type of purchasing organization preferred by large-scale purchases and project-based companies. Active consultants carry out procurement activities on large budgets with company-wide controls. The research is performed in coordination with the center through various analyzes.

Purchase Order Types

Purchase order types are as important as the purchasing types and purchasing organization types in purchasing transactions. Purchase order types include standard, planned, wide-ranging (covered) and contract versions. For standard orders only goods and services are ordered when needed.

For a standard purchase order, the product, price, time frame, and other specifications will be considered. For example: can be ordered for reduced or expired paper. In planned orders, managers are expected to give their best, although it is difficult to anticipate the company’s needs for the future. With a planned purchase order, a procurement specialist should try to determine how many products the company will need in time.

For extensive (covered) orders, it involves planning multiple purchase orders at once rather than scheduling in advance. It could be an informal pricing agreement. Multiple orders from the same company can be cheaper than new suppliers. In this case, the other party will be happy to provide a discount and mutual benefit. For contract orders, there are purchases that are carried out on the basis of the contract where a legal agreement has been signed by both parties.

You can use purchasing software and systems to learn more about the types of purchasing and to facilitate the purchasing operations you will be running in your company.