Purchasing Cycle

The purchasing cycle, also known as the supply chain cycle or procure-to-sell (S2T) cycle is the action or process by which you purchase, acquire, and pay for the products and services that your company requires. For most companies of all sizes, including small local businesses to international megacorporations, the purchasing cycle starts with needs assessment and ends with bill of sale. This paper discusses a number of issues that affect the purchasing cycle and the role of logistics in this process. We look at the importance of logistics management, supply chain management, warehouse inventory management, and warehousing costs in the whole process.

Many business organizations are recognizing the value of real time information and are investing in information technology. To improve the accuracy and reliability of information that passes through the supply chain, advanced software systems are being developed. These software programs are designed to provide the necessary information needed for the execution of activities during the supply chain, ranging from basic real time information on warehouse inventory levels, through to real time information on manufacturer order statuses.

Another important aspect of the whole purchasing cycle is communication between the manufacturer and the supplier. Communication can be achieved through the use of automated communication lines such as those used for shipping and sales. Alternatively, manufacturers and suppliers can establish direct contact by means of a call center or e-commerce website. Manufacturers can provide detailed product information, including technical data, specifications, and quotes. Suppliers can respond by providing raw material lists and potential discounts and offers.

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