Decentralized Purchasing in supply organisation

Advantages:

  1. The local buyer will have better knowledge of the needs of his/her factory and local suppliers for improved service. It is more responsive to clients i.e. the user departments.
  2. The buyer will be able to respond more quickly to emergency requirements.
  3. Local purchase will be emphasized and this attribute will save on transport costs.
  4. Local purchase will contribute to local prosperity of the local community etc.
  5. Small and easy to manage.
  6. Easy to instill team spirit.
  7. Fast in decision making

Disadvantages:

  • May lead to buying expensively for lack of economies of scale.
  • Duplication of purchases may result.
  • Standardization of materials and procedures may be difficult to implement.
  • Specialized staff training may not be possible
  • Rivals can emerge



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