The different functions of a purchasing department

Purchasing is much more than just placing an order with a supplier. There are many studies and models that address the various aspects that are relevant to purchasing and its further professionalization. This also includes the further division of the purchasing function. In this article, three important divisions within the purchasing function are described in detail, but first we will briefly discuss purchasing in general in more detail.

What is purchasing?

In fact, everything that is accompanied by an invoice can be classified as purchasing. Purchasing involves obtaining all goods and services from external sources that are necessary for business operations, business maintenance and operations, on the most favorable terms for the organization.

Classification of the purchasing function

When an organization grows, the purchasing department will also grow. It will soon be time to divide the many tasks involved in the purchasing function properly or better. For this purpose, the purchasing function is divided into three parts:

  • strategic purchasing
  • tactical purchasing
  • operational purchasing

What is strategic purchasing?

When we talk about strategic purchasing, we are talking about establishing and adhering to purchasing principles and processes that arise from the general strategy and objectives of an organization. Strategic purchasing activities include optimally organizing the purchasing function, managing strategic supplier relationships and monitoring the quality that purchasing has to offer.

What is tactical purchasing?

When we talk about tactical purchasing, we mean specifying needs, selecting suppliers and contracting these suppliers. Negotiations about the conditions take place with these suppliers, which is also part of contracting. Tactical purchasing activities include being active in the supplier market, maintaining relationships with (internal) customers and communicating supplier agreements to the operational purchasing level.

What is operational purchasing?

When we talk about operational purchasing, we are talking about placing orders. Actually the final order for products or services. Monitoring orders and checking compliance with contracts is also a task that is part of the operational purchasing function. Finally, this also includes aftercare and evaluation. Operational purchasing tasks include creating purchase requests, approving them, receiving and registering products and services and structurally evaluating suppliers.