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Who does what? A Look at Procurement's Role in the Supply Chain
December 4, 2007
Recently an issue was brought to my attention on a shipment received in our warehouse. There was a quantity issue and a cost issue, but no one seemed to know whose responsibility it was.
The issue came up again, during a discussion at our local ISM meeting the other night, we realized there seems to be no really set rules. When is it a procurement problem? When does it become an AP issue? And when is it a receiving department issue?
It seems that if you receive the wrong quantity, the receiving department should handle it by shipping it back. If you receive the wrong item, the buyer should handle it directly with the supplier. If the cost is wrong, the AP department or in some companies the costing department should handle the issue. But what about freight issues? Is this a logistics issue?
At our meeting, we could not come up with what you would call a standard operating procedure. All companies do not work the same. Size and departments of a company makes a difference.
I would be interested to know if any companies have specific guidelines on who does what. As a buyer, you can’t very well say, “That is not my job.” The problem has to be handled but the question is by whom? What really determines which department is responsible, procurement, accounts payable or your receiving area?
Share your thoughts by posting a comment on this page.
Posted by Mary Walker on December 4, 2007 | Comments (9)
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
DaileySK commented:
Sounds familiar, my experience has taught me that most accounting departments are unwilling and/or incapable of managing receipt discrepancies, e.g. quantity or prices. As such, the task of rectifying such mistakes fall upon procurement, as the buyers typically know the suppliers well enough to resolve the issues, albeit with a lot of effort. SD
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
beginner commented:
That is why in this world there was a subject call supplier relationship management. Should be the responsibility of the most forefront personel dealing with supplier.
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
Tim commented:
if for quality issue,IQC always feedbacks to SQE and SQE will handle the issue; if for other issues, receving department always feedbacks to buyer, buyer will be the leader(maybe refer to some different departments such as logistic, purchasing and finane, etc) to resolve the issue with suppliers;
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
Mary Walker commented:
What about the company that has a costing department that is responsible for the costing in your computer system. Also the company that has people in the warehouses that handle non conformance issues, the warehouse has the packing list and also the product. Sure we work with the supplier, however most issues relate to pricing not being updated or items received in wrong. In a dispute issue, sure the buyer should handle the situation, however just a price issue or a quantity issue, should the buyer spend their time on these type of issues? Just wondering?
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
DMJ commented:
In our organization - most falls to the purchasing group. We run SAP and the workflow system parks the invoice until resolved. It is purchasing's responsibility to seek the resource needed to resolve the issue. You are correct - it will change from company to company dependent on the system they run and the resources available.
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
skk commented:
Most everything falls into the hands of Purchasing, although we believe some of this should be handled by Accounting. If Receiving is wrong, Purchasing must contact supplier. If supplier terms change, Purchasing must update system. Purchasing obtains terms, forwards credit info, sets up new suppliers, maintains supplier data base, requests invoices, and contact supplier regarding any Receiving issues.
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
Scott commented:
Purchasing should be the first line of defense for these issues - Purchasing needs to slap the vendor around so that they ship the correct product at the correct price. Quality issues need to be addressed also with QC
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
Mary Walker commented:
Some people contend that if purchasing did not have problems with the suppliers, buyers would be out of a job. I know I spend a great deal of time on non conformances. It would be great to only have to buy product. Mary
In response to: Who does what? A Look at Procurement's Role in the Supply Chain
byrsue commented:
In my company the responsibility for incorrect shipments, pricing, invoice discrepancies and RTV's are handled by the procurement group.