Question

Explain why do we need policies and procedures in purchasing
management?

Answer 1

Policies and procedures in purchasing management are essential for consistency, compliance, risk management, transparency, and accountability.

Step-by-step explanation:

Policies and procedures are essential in purchasing management for several reasons:

1. Consistency and efficiency: Having well-defined policies and procedures ensures that purchasing activities are conducted consistently and efficiently. For example, having a documented process for supplier selection and evaluation helps in making informed decisions and avoids unnecessary delays or mistakes.
2. Compliance and risk management: Policies and procedures play a crucial role in ensuring compliance with legal and regulatory requirements in purchasing. They help in managing risks such as fraud, corruption, and unethical practices. For instance, having clear guidelines for contract management helps in preventing contract breaches and disputes.
3. Transparency and accountability: Policies and procedures provide transparency in purchasing activities by setting clear expectations and standards. They help in promoting accountability by defining roles, responsibilities, and authorities of different individuals involved in the purchasing process.

In summary, policies and procedures in purchasing management are necessary for consistency, compliance, risk management, transparency, and accountability.