Study fo purchasing system and procedures-Indian Institution of Management Banaglore: Banglaore.

Abstract

The purchasing function is getting strategic importance in recent years. Since the purchase value of materials is more than 507. of the total,it is apparent that purchasing is important activity of the organisation. The effect of reduction in the cost of purchase will increase the profit of the organisation. The study focuses on improving the present purchasing system and procedures in CONTROLS & DRIVES COIMBATORE (P) LTD.The study clearly indicates that as the organisation is growing at a fast pace,a separate department is to be set-up for purchasing. This will help to identify purchasing problems and implement effective solutions. The study of purchasing functions shows delay in incoming materials from the regular suppliers,long lead-time of local purchase and very high cost of materials when it is purchased from the local suppliers. The study revealed that by implementing effective measures significant cost reduction is possible. It is suggested that the lead-time of each suppliers be analysed ,so that speedy action can be taken to avoid delays. The company should prepare a approved local suppliers list by considering quality and cost. So that in case of emergency, materials would be procured only from the approved sources. The study of sub-contractors management revealed the lack of effective communication with suppliers regarding supply of specifications and drawings. Vendor development system has been suggested to ensure proper communication with suppliers. The officials should meet the suppliers regularly to avoid an communication lapse. A vendor rating system has been suggested for performance evaluation of suppliers.For selecting vendor rating factors a questionnaire survey was conducted in the organisation. Based on that result three main factors, quality, delivery and cooperation have been identified as important parameters. Also some modifications have been suggested in the documents and systems for effective functioning of purchasing activities of the organisation.