Purchasing plan refers to the enterprise management personnel in the understanding of the market supply and demand situation, awareness of the process of production and business activities and mastery of the law of material consumption on the basis of the planned period of material purchasing management activities made by the foreseeable arrangements and deployment. Purchasing plan is based on the production department or other use of the department's plan to develop including the procurement of materials, procurement quantities, demand for the date of the contents of the plan form.
Procedure for Preparation of Purchasing Plan
Purchasing plan (budget), which is a part of production/sales plan, is also a part of the company's annual plan and objectives. Usually, the sales department's plan (i.e., sales revenue budget) is the starting point of the company's annual business plan, and then the production/sales plan is determined. The production/sales plan consists of a purchasing budget (direct raw material/commodity purchase costs), a direct labor budget, and a manufacturing/selling expense budget. As you can see, the purchasing budget is a detailed plan of the quantity and cost of raw materials, supplies, parts, etc. required by the purchasing department in order to meet the annual sales forecasts or purchasing quantities and to facilitate the achievement of the goals of the entire enterprise. Purchasing plan (budget) is the core of the whole enterprise budget, but if the preparation of a separate, not only lack of practical value, but also lose the cooperation of other departments.
Procurement plan preparation process
Procurement plan (budget), is part of the production/sales plan, but also part of the company's annual plan and objectives. Usually, the sales department's plan (i.e., sales revenue budget) is the starting point for the company's annual business plan, and then the production/sales plan is determined. The production/sales plan consists of a purchasing budget (direct raw material/commodity purchase costs), a direct labor budget, and a manufacturing/selling expense budget. As you can see, the purchasing budget is a detailed plan of the quantity and cost of raw materials, supplies, parts, etc. required by the purchasing department in order to meet the annual sales forecasts or purchasing quantities and to facilitate the achievement of the goals of the entire enterprise. Purchasing plan (budget) is the core of the whole enterprise budget, but if the preparation of a separate, not only lack of practical value, but also lose the cooperation of other departments.
a. Purpose of Purchasing Plan Preparation
The operation of an enterprise begins with the purchase of commodities/materials, which are processed and manufactured or combined to become the main products, and then sold for profit. How to obtain sufficient quantity of materials is the focus of procurement planning. Therefore, procurement planning is the process of estimating what materials should be purchased and in what quantities at any given time during a specific period in order to maintain normal production and marketing activities. Purchasing plan should achieve the following purposes: (1) Estimate the quantity and time of goods/materials to be purchased to prevent supply interruption, which affects production and marketing activities. (2) Avoid excessive storage of purchased goods/materials, which will accumulate funds and take up space for stacking. (3) Cooperate with the company's production/purchasing plan and the height of funds. (4) Enable the purchasing department to prepare in advance and choose favorable time to purchase commodities and materials. (5) Establish the reasonable consumption standard of commodities and materials in order to control the cost of purchased commodities and materials.
b. Purchasing budgeting process
Purchasing budget is the amount of procurement plan to express to the form, its preparation must be based on the entire enterprise budget system, and follow a certain process.
c. Purchasing Quantity Planning Process
c-1 Purchasing Plan A sales plan or target can be formulated from sales forecasts and human judgment. A sales plan is an indication of the expected number of products to be sold at different times, while a production plan is based on the number of sales, plus the expected ending inventory minus the beginning inventory. c-2 Purchasing Commodity / Bill of Materials Purchasing plan only shows the quantity of products, and can not directly know what materials are needed for a product, and how much, so it is necessary to use the purchasing commodity and bill of materials. The list is prepared by the marketing department in cooperation with the purchasing department of the company, and it shows the basic commodities from which various products are manufactured or combined. Based on the list, it is possible to accurately calculate the safe quantities of certain commodities and combinations of stocks and inventories. The basic safety quantities listed in the list, commonly known as standard usage (in 15- or 30-day cycles), are compared with actual usage as a basis for cost control. c-3 Inventory Control Card If an item is in stock, the quantity purchased does not necessarily have to equal the quantity sold. Therefore, the quantity of merchandise purchased does not necessarily equal the basic merchandise requirement calculated based on the inventory. The purchasing clerk should calculate the correct quantity to purchase based on the actual and planned quantity of commodities required, taking into account the safe in-transit time for purchasing and the safe stock level, before issuing requisitions and carrying out purchasing activities.
dHow to do a good job of procurement planning
1, understand clearly the material and quantity of their own procurement 2, the technical parameters of the procurement of materials to be clear data, the establishment of the document 3, according to the number of natural months of consumption to predict the corresponding unit price, supply capacity, and the speed of the 4, for the more special and critical environments and processes should be paid special attention to the time to meet.