Strategy, Tactics and Purchasing process Business & Marketing Essay

Strategy, Tactics and the Purchasing Process
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Purchasing departments play crucial roles in organizations that are keen on increasing productivity, profitability and performance for the foreseeable future. The employees in those departments ensure their companies have enough materials and resources for the implementation of stipulated objectives. As such, it is imperative to have skilled and qualified personnel managing the purchasing process. The initiative will not only ensure that quality materials are purchased but also that they obtained from reputable suppliers and vendors at pocket-friendly prices. Companies with ineffective purchasing departments tend to overspend on items and consequently, incur losses. On this breadth, organizations usually employ two forms of purchasing depending on their long-term and short-term requirements. These are strategic and tactical purchasing respectively.
Strategic Vs Tactical Purchasing/ Sourcing
Purchasing strategies otherwise known as strategic sourcing is an approach that focuses not only on the current but also future requirements of an organization. Purchasing strategies are mostly employed by companies that are keen on making the most cost-effective sourcing decisions from a pool of efficient suppliers. These vendors are expected to deliver quality goods on time and at mutually agreeable terms. Benton (2014) reiterates this position and shares that “One of the main focuses of strategic sourcing is having both the lowest TCO and lowest supply line risk”. Furthermore, purchasing strategies are built on the creation of closed loop links which exist between the suppliers and the organizations. As such, it is easy to improve on different elements such as delivery, quality and price. Some examples of purchasing strategies include the following. For one, Supplier Optimization and Relationship Building is for organizations that are keen on having a pool of vendors who offer best prices and terms. Suppliers who are unable to keep up the delivery of quality items at stipulated terms and prices are discarded. Secondly, Total Quality Methods is a purchasing strategy that is centered on quality service with no room for errors (Adobor & McMullen, 2014). Thirdly, Risk Management is a purchasing strategy that involves the ...