A vital part of any manufacturing or logistics business is the purchasing cycle. Whatever side of the production cycle your business falls on, whether you produce the goods, distribute them, or receive them for long-term storage, the purchasing cycle affects nearly every step of an item’s lifecycle before it arrives in the hands of the consumer. Befitting its important role in product distribution, there’s a number of different steps in the purchasing cycle, and it’s important to keep these in mind as a warehouse manager:

1. The order is sent to purchasing: The first step is to send the order of needed items to the purchasing department. Orders generally include a description of the item needed, the quantity needed, desired delivery dates, and who (or what department) is requesting the purchase. It sounds a little obvious, but not a lot is going to get done until the order is officially on the books.
2. A supplier is selected: After the order is made official, the purchasing department will then work to identify suppliers who can fulfill the order. If no suppliers are currently available, new ones will have to be identified – otherwise, if you have a supplier that can fulfill the order, this brings us to the next step:
3. The order is placed: This tends to be one of the lengthiest parts of the purchasing cycle, and accordingly is one of the most important. If the order involves a large item or a high expense, particularly if it will be a one-time purchase for equipment or something, vendors will be asked to bid on the job. The bidding process will typically involve other personnel from the purchasing company such as operating specialists or product designers to help with negotiations. Large-volume or continually ordered products (anything that has to be purchased on a regular basis) may be covered under blanket purchase orders and might not require the bidding process, as these items may only be available in certain quantities from certain vendors. Care must be taken to exercise some control over these purchases, otherwise they run the risk of being over-ordered or ordered too frequently in regards to usage.
4. The orders are monitored: Much like checking a package’s tracking number when you’re waiting on an order from Amazon, any purchase order should be followed up on to keep everything on schedule. Check in with your vendors on a regular basis to monitor the status of an item, predict delays, and keep every step of your supply chain appraised of an order’s status – this way if anything goes wrong, you’ll be able to adjust your plans.
5. The order is received: It isn’t as simple as just waiting for a box to arrive. Once the shipment arrives, it needs to be checked immediately for quality and quantity of items to ensure the order is correct. The purchasing department needs to be notified to update any outstanding invoices, as well as the accounting department and the operational unit who will be handling the item. Finally, when the item is received, floor managers need to make sure their department has enough wire shelving and warehouse storage to properly receive and store the item.