1. Discuss the Parameters and Ten ‘R’’S of Purchasing.

828 WordsJun 1, 20134 Pages
The success of any manufacturing activity is largely dependent on the procurement of raw materials of right quality, in the right quantities, from right source, at the right time and at right price popularly known as ten ‘R’s’of the art of efficient purchasing. They are described as the basic principles of purchasing. There are other well known parameters such as right contractual terms, right material,right place, right mode of transportation and right attitude are also considered for purchasing. 1.Right price: It is the primary concern of any manufacturing organization to get an item at the right price. But right price need not be the lowest price. It is very difficult to determine the right price; general guidance can be had from the…show more content…
Therefore, purchasing should keep ‘progress’ as its key activity and should be future-oriented. The purchase manager should be innovative and his long-term objective should be to minimize the cost of the ultimate product. He will be able to achieve this if he aims himself with techniques, such as, value analysis, materials intelligence, purchases research, SWOT analysis, purchase budget lead time analysis, etc. 7.Right contracts: The buyer has to adopt separate policies and procedures for capital and consumer items. He should be able to distinguish between indigenous and international purchasing procedures. He should be aware of the legal and contractual aspects in international practices. 8.Right material: Right type of material required for the production is an important parameter in purchasing. Techniques, such as, value analysis will enable the buyer to locate the right material. 9.Right transportation: Right mode of transportation have to be identified as this forms a critical segment in the cost profile of an item. It is an established fact that the cost of the shipping of ore, gravel, sand, etc., is normally more than the cost of the item itself. 10.Right place of delivery: Specifying the right place of delivery, like head office or works,would
Open Document