Ad Hoc Purchase

CIOP is an end-to-end supply chain certification program that focuses on practical aspects in addition to the theoretical concepts. For example, a typical supply chain certification may teach what is cycle counting and how to do the ABC classification. CIOP starts with these fundamental concepts and goes on to teach the participants to develop the cycle counting policy of an organisation, 10+ criteria used in ABC classification, multi-criteria ABC classification and cycle counting best practices to increase the efficiency and effectiveness. In case of CIOP, you learn the concepts and will be ready to implement in your day-to-day job in supply chain. The pedagogy is structured such a way that all the concepts are explained with industry examples, which makes CIOP as the preferred training and certification program for supply chain within the industry.

The key to efficient supply chain management in an ad hoc purchasing activity is the ad hoc purchase order. It comprises all the details necessary to complete the purchasing procedure, such as the proposals, date, and time, the quantity, quality indicators, specifications, the specific goods, and finally the prices. 

This order must be executed in a timely manner to prevent exceeding of budget limits, to ensure competitive advantage, and to ensure inventory availability. The order must be captured in the correct place and must be transferred to production as and when the product is required. It may be established based on demand from customers, or it may be based on a forecast of products need based on previous sales and marketing campaigns.

Ad Hoc Purchase is used when the quantity of a product can not be estimated with available data at a particular point of time. Usually, this is done in cases when the amount is too large for an importer to purchase it from a wholesaler. The importer needs to purchase the goods from a contract manufacturer, who then sells it to the customer. When the customer wishes to change the design or specification of the product, or any other technical information, he must inform the contract manufacturer who can pass the information to the production facility for updating the supply. Without such updates the capacity of the production facility would be hampered, affecting production and extending the life of the goods.

Supply chain management adheres to the principle of economies of scale. If a warehouse can produce sufficient quantities of a product on a regular basis, it saves both the time and money involved in purchasing on a per order basis. It also enables the importer to reduce warehouse costs by sharing expenses between the parties involved. Thus, it helps maintain good relationships with their customers and enhance their sales performance.

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