BUS FPX 4024 Assessment 2 Enterprise Purchasing Process

BUS FPX 4024 Assessment 2 Enterprise Purchasing Process

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Capella University

BUS-FPX4024 Customer Behavior

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Understanding the Enterprise Purchasing Process: A Comprehensive Guide

The purchasing process within enterprises is an essential function, impacting not only day-to-day operations but also long-term efficiency. The steps involved can vary significantly depending on factors such as the nature of the purchase, the department in question, and the size of the company. For large organizations, this process is particularly complex. In this article, we will explore the purchasing process from the perspective of a hospital that employs over 1,200 staff members, focusing on key procurement areas like equipment and office supplies. Though our example primarily deals with procurement within the Human Resources (HR) department, the underlying steps are applicable across various departments within an enterprise.

Overview of the Enterprise Purchasing Process

The purchasing process in an enterprise is structured and involves several crucial steps, all aimed at ensuring that the organization gets the best value for its expenditures. From small office supplies to large-scale equipment purchases, each category of procurement requires a unique approach, proper approvals, and careful coordination.

Steps Involved in the Purchasing Process

No matter the size of the purchase, obtaining proper approval is the first and most vital step in the purchasing process. It helps ensure that expenditures are justified and meet the organization’s needs. Here’s a detailed breakdown of the steps involved, starting with the HR department’s typical purchases:

1. Initial Request and Inventory Review

• For smaller items like office supplies, the HR Assistant begins by assessing the inventory to determine what is needed. This involves consulting with department members to ensure that all necessary items are identified. The HR Assistant then prepares a purchase list based on the inventory needs.
• For example, typical office supplies might include pens, paper, and other standard items, while special requests could include color-coded folders, specific marker types, or ergonomic office supplies.

2. Submission of the Purchase Order

• Once the required items have been identified, the HR Assistant proceeds to initiate the order. This is usually done through an online account with a vendor like Staples, which is commonly used for routine office supplies.
• After entering the order into the system, the request is submitted for approval by the HR Director.

3. Approval Process

• For smaller purchases, the approval process is relatively simple. Once the HR Director reviews and approves the list of items, the purchase is confirmed, and delivery is typically scheduled within the next business day.
• However, for larger or more significant purchases, such as office furniture, standing desks, or technology like laptops, the process involves additional steps and higher levels of approval. Approval from the Information Technology (IT) department and Chief Financial Officer (CFO) is required before proceeding.

4. Assessment and Coordination for Larger Purchases

• Larger purchases often require a more involved assessment process. For example, when buying new laptops or office furniture, the IT department must assess the organization’s inventory and determine if any items can be repurposed.
• If additional items are needed, the IT department may coordinate with corporate suppliers to secure the necessary resources. Similarly, the CFO’s approval is crucial for any significant financial commitments, ensuring that the expenditure aligns with the organization’s budget and financial goals.

1. Final Confirmation and Delivery
   • Once all necessary approvals are in place, the purchase is confirmed, and the order is processed. In the case of smaller items, delivery typically occurs within a day or two. For larger items like office furniture, delivery and installation schedules are coordinated, and any potential delays due to supply shortages or backorders are communicated.

How the Enterprise Procurement Process Differs by Purchase Size

The purchasing process for enterprises can vary based on the size and nature of the purchase. For small office supplies, the process is straightforward: the HR Assistant reviews inventory, submits a request for approval, and confirms the order. For larger, more significant purchases, like technology and office furniture, the process becomes more complex, requiring approval from multiple departments and additional steps for inventory assessment and installation coordination.

Small Purchases: Quick and Simple Procurement

For smaller items like office supplies and minor office accessories, the procurement process is often swift. The HR Assistant plays a central role in managing these purchases, from identifying the need to submitting orders and confirming deliveries. The approval process is usually expedited, and the items are delivered quickly, often within the next business day.

Large Purchases: Complex Approvals and Coordination

In contrast, large purchases require more time, coordination, and approval. For instance, when procuring items like laptops or standing desks, approval from the IT department is required to ensure that the organization’s current inventory can meet the demand. Additionally, the CFO’s approval is necessary for financial authorization. Once all approvals are in place, the process can move forward, though delivery and installation timelines may vary based on inventory and logistical factors.

The Importance of Structured Procurement in Large Enterprises

The procurement process is an essential function in large organizations, ensuring that resources are acquired efficiently and in line with budget constraints. Structured procurement processes not only streamline operations but also help organizations avoid unnecessary delays and ensure the timely availability of required items. Whether purchasing office supplies, IT equipment, or office furniture, following a structured and well-defined process is key to achieving successful procurement outcomes.

Conclusion

The purchasing process within enterprises involves several distinct steps, from initial requests and inventory reviews to obtaining approvals and coordinating delivery. While smaller purchases like office supplies can be completed with minimal approval and quick delivery, larger items like laptops and office furniture require more in-depth coordination and approval from multiple departments. By understanding and following the structured purchasing process, organizations can streamline procurement, reduce inefficiencies, and ensure that all purchases align with their financial and operational goals.

References

Indeed Editorial Team. (2021, March 22). Purchasing Process: Definition and Steps. Retrieved October 13, 2022, from https://www.indeed.com/career-advice/careerdevelopment/purchase-process

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