Purchasing

Glossary of Terminology

Most people involved in Purchasing are used to words that are not common in everyday conversation such as “Absorption Costing”. However, sometimes the true meaning of a word is not what you have been taught and you should consider that many of the jokes at the expense of the Irish are an abomination. This short extract from the Irish Medical Dictionary proves beyond doubt they are a much higher form of life: Artery – the study of Paintings and Sculptures Caesarean Section – Italian quarter acre building site Cauterise – Make eye contact with female Dilate – Live a long and useful life Fibula – A small falsehood Labour Pain – Work related injury Nitrates – Cheaper than phoning during the day Rectum – Nearly killed him Terminal Illness – Feeling really sick at an airport

Definition of Purchasing

To procure externally those goods and services not available internally at the lowest possible price taking into account quality and service as well as form, fit and function. To perform this function many companies employ the services of Purchasing personnel, unfortunately this is a broad description which usually covers all levels of buying, from the Purchasing Manager down to the Order Writers. Too often pressure of work can result in most of the day to day buying being performed by the latter while the Senior Purchasing staff are struggling with the so-called major commodities. The lower echelons therefore usually do not have the authority, or in some cases, the skills to seek cost savings. Any they do attain are usually those promoted by professional sales people offering specials and quantity discounts etc. But, not all sales staff are this way – continue reading…

Backorder … What does it really mean?

If you are party to a Supply Agreement or Contract you may feel you have adequate protection against stock outages through various clauses in the agreement. In reality though all too often you will experience those frustrating stock problems that are too readily labelled “Backorder”. Now what this usually means is that your supplier expects loyalty from you in order placement but is unable or is unwilling to maintain sufficient stocks to meet your ongoing needs. The supplier may hide behind his JIT aims and plead total innocence and blame the rest of the world for stock problems arising from trying to walk the supply/demand tightrope! In fact, he would rather you lifted your reorder point and provided him with longer lead times, but from the users point of view this goes against the reasons for the contract being set – continue reading…

Institute of Purchasing

CIPS Australia (CIPSA) is the not-for-profit peak body for procurement professionals and is wholly owned by The Chartered Institute of Purchasing & Supply, an international organisation based in the UK, with 42,000 members in 120 countries. CIPSA is mandated to act in the public interest and for the benefit of the procurement profession as a whole. It seeks to do this by: acting as a voice for the profession; helping individuals to be better professionals; helping organisations in Australia and New Zealand improve their procurement practices; and building the global body of knowledge for procurement. Visit www.cipsa.com.au for more information on the CIPSA training courses being run this year. Managing Director: Jonathan Dutton Contact phone: 1300 765 142 Int Phone: 61 3 9614 2333 Email: info@cipsa.com.au Membership email: membership@cipsa.com.au Web: www.cipsa.com.au CIPS Australia Head Office 10/520 Collins St Melbourne VIC – continue reading…