Purchasing System

How companies buy stuff.

You probably don't think a lot about it, but you have a purchasing system for groceries. You figure out the meals you want for the week (frozen burrito, frozen pizza, peanut butter eaten right from the jar using a Kit-Kat as the spoon, etc.). Then you make a list. If you've got roommates and/or loved ones in the house with you (pets count...otherwise, everyone here at Shmoop would lead sad, lonely lives), you have to run the list by them. Once the list is settled, you either order online, or you head out to the store.

Companies do the same thing. Because they've got a lot of MBAs on staff, they have more formalized processes. These fall under the general heading of "purchasing systems."

Essentially, the term describes how companies buy stuff, i.e. the process they go through to pick out what they need to buy (printer ink, new laptops, Kit-Kats and peanut butter for the breakroom, a fleet of corporate jets, etc.) and then the steps needed to make the actual purchases. And, because these exist, many large companies use software and other technological aids to streamline the purchasing systems.