Procurement and Purchasing of a Product.docx

Procurement and Purchasing of a Product 1. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-3-638.jpg?cb=1492765897)What is procurement? 2. Types of Procurement Features :Direct Procurement ,Indirect Procurement Raw materia...

Procurement and Purchasing of a Product 1. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-3-638.jpg?cb=1492765897)What is procurement? 2. Types of Procurement Features :Direct Procurement ,Indirect Procurement Raw material and production goods Maintenance & repair Procurement Size Larger Smaller Turnover Rate Smaller Larger Time for Ordering Larger Smaller Accuracy of product information More Less Cost of Product Less More 3. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-6-638.jpg?cb=1492765897)Five rights of Procurement 4. Why should procurement be a challenging problem? Procurement chain network is often very complex. Procurement chain partners have conflicting objectives. Consequently, making everyone to agree is not an easy task. 5. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-13-638.jpg?cb=1492765897)Characteristics Basic procurement strategy Low value and low risk (Quadrant 1) Goods or services in this category are usually low value. These goods or services can be routinely procured or procured as required. The skills required for these types of transactions are generally administrative. Keep procurement in this quadrant relatively simple to minimise procurement and transaction costs. Document the administrative procedures for procuring goods or services in the entity\'s procurement policies and procedures. 6. Quantifying drug requirements Critical issues in quantification 7. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-18-638.jpg?cb=1492765897)Good pharmaceutical procurement practices 8. What is a Purchasing System 9. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-20-638.jpg?cb=1492765897)Difference between purchasing and procurement "Procurement" is the overall function that describes the activities and processes to acquire goods and services. Importantly, and distinct from "purchasing", procurement involves the activities involved in establishing fundamental requirements, sourcing activities such as market research and vendor evaluation and negotiation of contracts. It can also include the purchasing activities required to order and receive goods. \"Purchasing" refers to the process of ordering and receiving goods and services. It is a subset of the wider procurement process. Generally, purchasing refers to the process involved in ordering goods such as request, approval, creation of a purchase order record and the receipting of goods. 10. Goals of Purchasing The goal of purchasing is not only to procure raw materials at the lowest price, but to reduce the cost of the final product. For ensuring this, there are a large number of well known parameters.. Determining the terms of purchase DISCOUNT Trade discount Quantity discount Cash discount Serial discount 11. [ ](https://image.slidesharecdn.com/procurementpurchasing-170421083437/95/procurement-and-purchasing-of-a-product-33-638.jpg?cb=1492765897)Trade discount( T.D) Trade discount is given to a firm for performing a level of set of marketing activities such as wholesalers and retailers. Wholesaler- 15 to 20% Pharmacy- 30 to 50% Example: Company A sells 100 tablets at retail price of \$10 T.D of pharmacy- 40% and T.D of wholesaler- 20% 12. Quantity discount( Q.D) Quantity discount basically given when a designated quantity is purchased at one time or within a certain period of time. Percentage of discount varies on the popularity of drug.(more popular, less discount) EXAMPLE A pharmacist deducts T.D of 15% from a \$100 product and obtained \$85 Then he separately deducts Q.D of 5% from previous \$85 and obtained \$80.75. 1. Quantification of medicines needs 2. Why we need to quantify the medicines need?  3. To ensure Available of good quality, safe and less expensive medicines all the time Part of a sequence of interdependent steps in the medicines supply management system. 4. Main components are 5. Selection Quantification Procurement Distribution  6. Method Advantages Disadvantages Consumption  Morbidity data not required  Requires less detailed calculations Difficult to review prescribing habits Difficult to get consumption data for new facilities -Good for hospitals (because Treatment is more complex) Does not encourage good morbidity recording Reliable if consumption is well recorded and stable Unreliable if there have been long stock-outs Preparing an action plan for quantification. Using centralized or Decentralized quantification. Using manual or Computerized methods for Quantification.  Estimating the Time required. Developing the drug list.  Estimating Total procurement Cost.