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STUDENTS CORNER -54

Before we go into the study of Requirement Planning, we have to look into the other two kinds of purchasing, at least briefly.

Industrial Purchasing is the next one we need to know about at least in basics. Suppose you are making ready-made dresses –Diwali season, dress comes to mind at once--; you require cloth, accessories, tailors,  sewing machines, to mention just a few of the most important. Frills, design on the dresses can also be included; for the time being let us restrict to just a few of the requirements for making dress.

You have to procure cloth in bulk and also the accessories too in large quantity. There must also be adequate number of machines to sew and tailors too. When you thus procure huge quantity of cloth for your business of dress-making, it is actually industrial purchasing because you use what you purchase to make dresses and sell them.  Any material that an industry needs to keep its business flowing without break can come under such industrial purchasing. You see that the purchase you make allows you to use tailors to sew cloth into dresses. Industrial purchasing therefore has to take care of the supply of materials and men you require for the continuity of your business. It means you have to buy the right quantity of cloth from a right supplier who gives you what you need in the right time and the right place and also for a right price.

In big organizations, there will be a department exclusively attending to the process of industrial purchasing. There are some more details about the industrial purchasing; inventory is a very significant factor in the industrial purchasing. But we will go into all those details when they are needed contextually.

The last kind of purchase is called Institutionalized Purchasing or Government Purchasing. Here, governmental agencies and institutions buy things for public utilities. In business, since purchases are made in big bulks, this kind of purchasing attracts immediate attention from the business houses.  Again, there are some vital differences between this kind of purchasing and the rest of the kinds.  Basically, in the other three kinds of purchasing, investment of capital is made by the individuals and therefore the profit goes to them only. Here, in this Institutionalized purchasing, the source of investment is totally different and they are generally taxes, grants and donations.

We will see some more details in our next session. 

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