Business counselor’s practice toolkit for counseling of the purchasing function

November 2, 2015

4541Purchasing is a mission critical, albeit often ignored, function for every business and business counselors can add significant value for their client by understanding the needs of the purchasing function and providing the necessary support with regard to contracts, policies and procedures and compliance guidelines.  Chapter 82 (§§ 82:1 et seq.) of Business Transactions Solutions covers supply and purchase arrangements relating to the procurement of goods and materials that will be incorporated into the purchaser’s manufacturing and other business activities.  Purchasing is one of many activities that companies must undertake as part of their overall supply chain management processes and strategies and counseling the purchasing function will require familiarity with the company’s product development activities (Business Transactions Solutions §§ 81:1 et seq.) and involvement in the structuring and negotiation of manufacturing arrangements (Business Transactions Solutions §§ 84:1 et seq.) and repair and maintenance agreements (Business Transactions Solutions §§ 106:1 et seq.).

The forms library for properly advising the purchasing function should track each of the key activities in the standard procurement process.  The first area of concern is assisting purchasing personnel with selecting vendors including collecting quotes from prospective vendors and carrying out vendor due diligence.  Among the forms that can be used at this point are the following:

  • Policy for selection of vendors and purchase of goods and services (§ 82:132)
  • Requests for quotation from vendor (see §§ 82:133 and 82:134)
  • Vendor due diligence checklist for procurement of it services (§ 82:135)
  • Supplier pre-assessment questionnaire (§ 82:136)
  • Supplier survey quality system questionnaire (§ 82:137)
  • Supplier questionnaire regarding C-TPAT compliance (§ 82:138)
  • Procedures for initiation and management of vendor relationships (§ 82:139)

Gutterman WLEC bannerOnce the vendor has been selected counsel must be able assist the client in negotiating and documenting the terms of the supply arrangement and should have a wide range of tools available for both short- and long-term supply arrangements including the following:

  • Standard purchasing terms and conditions (§ 82:46)
  • Purchase orders and short-term supply contracts (§§ 82:140 et seq.)
  • Long-term purchase agreement (§ 82:61)
  • Long-term goods supply agreements (§ 82:84 and §§ 82:148 et seq.)

Finally, counsel should be able to provide support for the procurement group’s efforts to establish internal guidelines for purchasing activities and monitoring the activities and compliance efforts of supply chain partners:

  • Sample ethics guidelines for purchase-related activities (§ 82:156)
  • Supply chain social and environmental responsibility policy (§ 82:157)
  • Supplier social and environmental responsibility agreement (§ 82:158)
  • Supplier audit process (§ 82:159)
  • Standards for suppliers (§ 82:160)
  • Alternative and optional provisions—Ethical standard and human rights (§ 82:161)

Useful checklists for counsel’s tool kit for assisting the purchasing function include a checklists covering matters to consider with respect to supply chain management (§82:162), vetting and selecting suppliers (§82:163), structuring and documenting supplier relationships (§82:164), designing training programs for the procurement function (§82:165) and  monitoring and evaluating supply partners(§82:166).  Counsel should also use drafting and review checklists for standard purchasing terms and conditions (§ 82:59 and 82:60), a long-term purchase agreement (§§ 82:82 and 82:83) and a long-term goods supply agreement (§ 82:130 and 131).

Finally, Business Transactions Solutions includes other helpful training materials for working the purchasing functional include Slide Deck presentations on Counseling the Purchasing Function (§82:167) and Supplier Selection and Management (§82:168) and the Business Counselor’s Guide to Purchasing (§82:169) from the Business Counselor’s Mini-MBA Program.


Titles by Alan Gutterman