Organizational Buying Characteristics of organisational procurement Multiple influencers
Organizational Buying
Characteristics of organisational procurement Multiple influencers u Technical sophistication u Value analysis u Well established procedures u Longer term and closer relationships. u Closer interactions among multiple functions. u Supplier proximity considerations. u
Buying situations New task u Modified rebuy u Straight rebuy u organisational buying
Buying phases Recognition of a problem u Solution determination u Determining the needed item u Search for and qualification of potential sources u Acquisition and analysis of proposals u
The Buy grid Framework for Organizational Buying Situations
Buying center § § § The decision making unit Group of individuals who come together to make a particular purchase decision Power base
Buying center roles u Primary roles • Decision makers • Influencers u Secondary roles • Users • Buyers • Gatekeepers
Objectives in organisational buying u Task oriented • Price • Services • Quality • Assurance of supply • Reciprocity u Non task objectives
How purchasing activities influence buying behavior… u Material requirement planning (MRP) • • • u Just-in-time purchasing (JIT) • • u u Demand management Production management Material management Only one supplier Long term relationships Frequent supplies Precise quantity at precise time Centralized purchasing Buyer technology • On-line DSS, on-line order processing etc
Factors influence the size of the buying Centre Characteristics of the firm u Purchasing situation u Perceived importance of the product u
Psychological factors influencing decision making Difference in role orientation u Difference in information exposure u Perceived risk u
Conflict resolution strategies competing collaborating Own concern compromising accommodating avoiding Others concern
Sources of power in conflict resolution u Reward power • Ability to influence by granting monetary benefits u Coercive power • Ability to impose punishment u Legitimate power • Formal authority u Personality power • Ability to influence with personal charm u Expertise power • Information or knowledge power
Evaluation of supplier performance The categorical method u Weighted point method u Cost ratio method u
Weighted point method Factor Weight Actual performance Score Quality 40 90% acceptable 40*0. 9=36 Delivery 30 90% on schedule 30*0. 9=27 Price 20 125% of lowest bidder 100/125=0. 8 20*0. 8=16 After sales 10 60% on time 10*0. 6=6 Total score 85
Cost ratio method
TERIMAKASIH
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