Question

Let's look at how a purchasing department (or sometimes called the procurement or supply management department) may interact with other departments and affect company performance. For instance, how does purchasing affect the finance department and the company's financial performance? Also, how does purchasing affect the engineering or operations centers, marketing and sales, and administration?

Answer 1

PURCHASING DEPARTMENT

Purchasing department is the main and important part of the supply change management. As it helps to fulfilling the need of company by purchasing required resources on time. It helps to reduce the cost of doing business as always tries to minimize the cost of production by purchasing product on lowest cost.

Purchasing department may interact with other department and affect the company performance by following ways:

• If Purchasing department fails to fulfil the need of other department on time, which will gave negative impact on performance of other department and can result in delay in work.
• As every department is related with the purchasing department, Mainly the production department and finance department can get more affected by the performance of purchasing department. As production department want its raw material available on time and finance department wants purchasing department to purchase good on reasonable price by which they can improve the financial statement. If purchasing department fails in doing its activities then both of the department can get easily affected.

Question 2. How does Purchasing affect the finance department and the company's financial performance?

Solution 2.Every companies finance department wants to reduce the cost by which company can increase its income statement. If Purchasing department will buy the resources like raw material or any other product for the company on reasonable price then they can minimize the cost and can increase the profit easily. Rest of remaining amount    finance department can gave it for further expansion works in their business.

Question 3. How does purchasing affect the engineering or operations centers, marketing and sales, and administration?

Solution 3.

• Operation centers provides complete service monitoring with end-to-end management. Operation centers are required good quality of raw material by which they can make finished good. As if purchase department provides them good quality material then they can gave them also good quality of finished product.
• Purchasing department can affect the marketing and sales of a company because every company wants to provide their product in market on time. If purchasing department fails to fulfil the need of purchasing department on time which will result in delay in production and then it will turn into delay in providing good in market on time and that will gave affect in sales. Because customers want their product on time. And every companies administration want to reduce the cost by which they can earn more profit can retain their stakeholders.
  

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