Assessing your requirements

Regular assessment of purchasing requirements is generally based on a system of keeping a certain number of each component in stock, based on previous requirements. So, if your optimum number is ten and you currently hold four, you would order six.

This is fine, so long as requirements do not, or are not likely to, change. But, like the supermarket manager who orders Christmas puddings in October - along with turkeys, mince pies and extra sage and onion stuffing - you need to be able to look ahead and anticipate the future requirements of your department. Is the business seasonal? Are changes within the market likely to lead to increased or decreased demand? Is your product likely to be made obsolete due to technological advancements?

Get into the habit of keeping up to date with industry news and purchasing trends; that way you are likely to stay one step ahead and be able to order stock accordingly.