The following six purchasing policies address not only mainstream buying behaviors but the exceptions that tend to occur periodically, as well. Having written policies to address all of these will help to minimize the amount of time and disruption that each of these can have on the supply chain. They will also help to shape your customers' expectations, allowing you to deliver exceptional service.
PRODUCT RECALL POLICY
This policy will identify who is responsible for acting on recall processes. It will identify when these occurrences are deemed necessary and the communication chain of command. It will identify record keeping and regulatory requirements, as well as any data mining exercises.
PRICING NOTIFICATION/ISSUE RESOLUTION POLICY
This policy will identify how often product pricing will be reviewed and the customer service aspects such as turnaround times for problem resolution. Pricing accuracy targets may be part of this policy with expectations to produce advanced pricing increase notifications from vendors and customers alike. This policy may also identify aging requirements/restrictions with respect to notification and associated corrections. Pricing policies will also apply to service charges and the methodology for determining fees [line item, by invoice, etc.], how they will be applied and how often they will be reviewed.
FREIGHT PAYMENT POLICY
This policy identifies in what situations you will incur inbound freight expenses and outbound expenses. It will address how any freight charges will be captured and charged in terms of by line item, per invoice or scheduled billing. The inbound freight policy will be communicated to all suppliers as part of the vendor relations charter. This policy will also identify the "approved" common freight carriers based on a negotiated agreement/rate.
DROP SHIPMENT POLICY
This policy will identify when drop shipments may be initiated both proactively and reactively. It will also address when associated expenses are absorbed and/or charged out to customers and the methodology for charging them. It should also address repeated use or abuse of related activities along with penalties [if any] and or behavior change requirements.
INVENTORY BULK/FORWARD BUYING POLICY
This policy will identify who will be responsible for evaluating potential returns on investments associated with bulk or forward buying opportunities. This may include elements such as space and handling requirements, usage or consumption, vendor relationships and overall supplier incentives. The evaluation will also include any logistics costs in "spreading" inventory around the system.
CUSTOM PRODUCT POLICY
This policy addresses the requirements needed prior to bringing any custom products into the supply chain. It may include a guarantee with respect to sales or use and may be backed by a guarantee from suppliers. This policy also identifies how often these products will be reviewed and the authority levels required prior to bringing in this inventory. The policy should balance lead time commitments with historical demand and investment.
