Procurement and Purchase Management
Management is much concerned about the means and method by which materials are bought into the organization for internal operations. In fact, a careful and detailed budgetary provisions have to be made, considered and analyzed before approval, when it comes to purchasing decisions. This is because of the attention given to the kind of material to be purchased and way at which materials are valued in the organization. Hence, purchasing is the first phase of Materials Management, and the most important function of material management. A significant or a large sum of a firm's finance (money) outflow is used or blocked in materials acquisition. If the size or volume of the materials that is needed in the firm are large and it requires a continuous (repetitive) for production activities, then a separate purchase department would be established to handle such volume of activities. The function of purchasing department is closely connected with production and marketing functions, the efficiency of these production and marketing departments depends upon the efficiency of purchase department. It ensures that right type and quality materials are available in right quantity and at right time.