A purchasing supervisor is a manager who is in charge of the procurement department. Purchasing supervisors help businesses run smoothly by reviewing purchase requisitions, approving purchase price variances, and managing excess and obsolete costs. If the purchasing supervisor works for a manufacturing company, he will also be in charge of coordinating with program managers and production schedulers to determine when material will be available for operations to build products.
Purchase requisitions are requests for products to be purchased in order to fulfill customer orders. The purchase requisitions are reviewed by a purchasing supervisor, who determines what needs to be ordered. Buyers who work for the purchasing supervisor take care of the actual order entry. These purchase requisitions are typically generated by an enterprise resource planning (ERP) system. The purchasing supervisor will meet with members of the management team before authorizing the buyers to place orders with suppliers to ensure that customer demand and factory capacity are sufficient to support these orders.
The result of a quoted unit price being higher than the standard unit price loaded in the ERP system is purchase price variances (PPV). Because an unfavorable PPV could result in the company losing money, the purchasing supervisor must investigate any unfavorable PPVs to determine the cause. The purchasing manager will submit a request to the program manager to have the PPV recovered from the customer if the cause is due to customer-induced issues such as requests for shorter lead times or smaller quantities than what was originally quoted. If the problem is caused by buyer error or other non-customer-caused issues, the purchasing supervisor will conduct a root cause analysis and, if necessary, provide additional training or process updates to prevent the issue from recurring.
Excess and obsolete costs are also under the control of purchasing managers. The amount of material owned by a company that exceeds the demand provided by their customer is referred to as excess. Any material that has no demand and thus no use is considered obsolete. Purchasing supervisors review material detail on hand and on order on a regular basis to ensure that no stranded material is present.
If the customer’s demand changes and there is an excess of material, the purchasing supervisor will work with the buyers to return the excess to the original supplier. Any material that remains stranded after this due diligence is completed is usually submitted as an excess claim to the customer for payment. Obsolete material is frequently the result of an engineering change that removed a component from the bill of materials. The purchasing department will make every effort to return the parts or find another use for them. If it is unsuccessful, the customer will be sent an obsolete claim.