Understanding professional purchasing jargon

Purchasing vocabulary for professionals.

Many organizations pay a lot of consultants to implement Purchasing best practices. These consultants impress leaders with their knowledge of the

function, and their use of terms such as “product teams”,” process mapping ”, or even the “total cost of ownership.” Many of these terms are actually very simple and can be used on a daily basis. Here you will find some terms and their definitions:

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Benchmark: The comparison purchasing indicators or the performance of an organization with those of other Purchasing departments or external sources.

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The Purchasing Plan : This is a document prepared annually that summarizes the Purchasing Department's approach to the acquisition of each major group of products and services. The Purchasing Plan usually includes a forecast of demand, an estimate of expenses, as well as the actions taken by The Purchasing Department for the provision of products and services.

Product teams: a group of people representing various departments who are responsible for making key decisions about the purchase of a product or service.
Process mapping: creating a diagram that illustrates all the tasks and decisions associated with the process.

Stakeholders/stakeholders: Individuals within an organization who have an interest in a specific product or service to be acquired.

Strategic plan: a document that describes a long-term approach to purchasing and is closely linked to Organizational strategy.

Total cost of ownership: an estimate of all costs associated with the acquisition, use, and disposal of a product or service.

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Webconf' Out-of-Production Purchase

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