Purchasing Organizations Key Terms

Some key terms for getting to know purchasing organizations

Purchasing professionals are a critical asset to many businesses. These dedicated analysts make sure that inventory and production conform to the needs of a company. They also rule over procurement, which can be a tricky process filled with detailed equations about just what a business may need. Professional purchasing organizations help out, by providing information to businesses and career opportunities and resources to purchasers. Knowing about some key terms for these associations will help a business see how they assist in the purchasing process.

GPO

A Group Purchasing Organization or GPO is a general term for collaboration between companies to leverage best buying practices and get efficient purchasing solutions. A formal GPO can be made of very different companies with similar purchasing interests.

Benchmarking

Benchmarking is the practice of looking at the operations, progress and other aspects of a business against those of other similar businesses, either to arrive at some type of "average," or for other kinds of evaluations. Purchasing organizations routinely do this to better the collective knowledge of purchasing realities and techniques.

Purchasing Council

A purchasing council is a name for a kind of purchasing organization that works in the interest of a specific set of companies.

Career development tools

Career development tools are things that may contribute to a more abstract level of career achievement. They may not "add up" to a greater salary, at least not at any given time, but they generally advance professionals in their intended fields. Purchasers often join purchasing organizations as a career development tool to pool their knowledge and benefit.

Dues

Like other trade groups and organizations, purchasing organizations may expect members to pay financial dues, or sums of money annually, to participate. Purchasing organization members will pay dues in order to benefit from the career development afforded by purchasing organizations as described above.

Supply chain

When it comes down to what purchasing organizations really look at, the supply chain is often front and center. A supply chain is a multi-stage look at purchasing for a company.