Purchasing parts and supplies
Purchasing is made easy in property management
3 strategic conditions
To change the normal purchasing system, and thus offer a way around it, we must first defend three essential points, which are obstacles to be overcome within the company.
These three obstacles, or conditions, are necessary for the success of the new strategy:
- being able to register more than one supplier per purchase order;
- not managing purchase orders sequentially (order of P/O numbers);
- eliminate or limit the number of approvals required.
For example, in the event of an intervention (repair or project of any kind) requiring rapid action, maintenance staff should have sufficient autonomy to contact suppliers directly and specify their needs, while confirming the order with a unique number appearing on the document listing the parts and services required for the intervention. This document serves both as a single purchase order and a purchase requisition.
To defend this improved way of managing purchasing, we need to highlight its advantages and demonstrate with solid arguments that all the accounting principles and criteria of ISO 9000 quality standards are met without a hitch.
The arguments
ISO 9000 standards
According to ISO, you have to write down what you do and demonstrate that you do what you wrote down. You must therefore be able to trace the supplier’s invoice to the purchase order, and vice versa.
As a result, all you need to do is specify the different invoice numbers for each supplier on the single purchase order, and each invoice will refer to the same purchase order number (#PO).
Accounting.
The number of suppliers on a single purchase order poses no problem. There is no strategic information on a purchase order if it ever needs to be sent to the supplier (and this is rarely the case, as they only ask for the number).
In the case where the purchase order is sent to the supplier, with the new approach, he could better analyze the problem and make his recommendations, because he would be able to see the nature of the intervention thanks to the additional information contained on it.
An intervention equals a purchase order; whereas the opposite is not true. A purchase order does not necessarily entail an intervention on equipment. So there’s no need to manage or try to keep track of purchase order numbers in sequence.
Just because we keep close track of purchase order numbers doesn’t mean that someone can’t simulate one. This type of control adds no value to the organization.
Fear of losing control of purchasesIf a mechanic can manage his time and his work on an expensive machine, he can order parts and make decisions with a certain level of confidence. Initially, he could be allowed to buy up to $500 without approval; this won’t bankrupt the company. Corrective repairs are often emergencies, and the most expensive part of the job is the downtime (e.g., a machine running at $100/hr). So it’s not a 15% to 20% variation in the price of parts that can compensate for the costs attributable to machine downtime.
People who are empowered by the fact that they order themselves and see the value of the parts are often more attentive and take better care of the parts they handle. The machine becomes theirs, and they are responsible for it.
Reduced lead times
Repairs can be carried out outside normal office hours, or when the purchasing manager is away. So we can’t afford to jeopardize orders because no one can make decisions.
Three factors are important to the customer today:
- Quality
- Price
- Lead time
Everyone is expected to manage it efficiently, and you must be on price to remain a supplier, the most important factor that can vary easily.
The aim is therefore to reduce reaction times, redundant paperwork, unnecessary communications, and so on.
