What is Centralised Purchasing?

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Most organisational leads would definitely agree that choosing the right control scheme is always a challenge. For most CPOs and CFOs it is especially hard to determine which purchasing system is better: centralised or decentralised. In our today’s article, we will outline pros and cons of centralised procurement and figure out for which companies this control system would be the perfect decision.

What is centralised purchasing

Business Dictionary defines centralised procurement as a purchasing system in which all the departments of a company with a wide geographical distribution can make purchases through a common purchasing organisation.

In simple words, centralised procurement is a purchase of all required goods and services by a single department for all the branches of the entire company. Generally, a purchasing manager heads the department.

Centralised procurement is beneficial in finding the best deals with local vendors for the corresponding location of the company department. It not only aids in avoiding duplicity of orders, but also promotes advantages arising from the high volume bulk discounts, lower transportation and inventory management costs. Centralised purchasing is an indispensable solution for those who feel difficulties in managing long-running transitions and mending fences.

Read more on the Precoro blog and discover the six key benefits of centralised procurement.

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