Principles of purchasing & material management

Purchasing is the most important function in the field of materials management. Correct purchasing influences the profitability of an organisation to a great extent. Correct purchasing or efficient purchasing is possible only if the fundamental principles of scientific purchasing are followed. The fundamental principles of scientific purchasing are :
1. Principle of Right quality :
Materials of right quality are to be purchased for the job so that quality of the products can be maintained.
2. Principle of Right time :- Materials should be purchased in right time so that production will not be held up due to want of materials.
3. Principle of Right quantity : Materials should be purchased in right quantity so that wastages and losses due to overstocking can be avoided. Interruption in production due to shortage of materials can also be avoided by purchasing the right quantity of materials.
4. Principle of Right source - The right source of purchase will help to select the supplier who can offer to supply materials on favourable terms and conditions at an economical price and also in right time & quantity.
5. Principle of Right price - Materials should be purchased at right price by inviting quotations from different suppliers and making comparison. Principle of right price will help to keep the material cost under control.
6. Principle of Right place :- This principle requires that the required materials should be received from the supplier at a place which is near to the store or the production department requiring those materials or at some other convenient place. This will help to avoid the unnecessary consumption of time and money in carrying the materials from the place of supply to the place of requirement.