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
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
We will see some more details in our next session.