Purchase and Procurement PDF

In procurement, the process involves optimizing, managing, and disposing of goods or services for an organization from external sources. The key stages include: 1. Navigation: Identifying the right needs and market opportunities. 2. Vendor selection: Choosing the best suppliers. 3. Establishing paym...

In procurement, the process involves optimizing, managing, and disposing of goods or services for an organization from external sources. The key stages include: 1. Navigation: Identifying the right needs and market opportunities. 2. Vendor selection: Choosing the best suppliers. 3. Establishing payment terms: Setting up financial agreements. 4. Strategy development:Managing vendor relationships strategically. On the other hand, purchasing, focuses on the specific process of how goods or services are ordered, which is part of the broader procurement function The stages of Procurement sourcing stage identifier needs create purshuc ruqerment asses vendor purchas stage negation term create order receiving and inspect goods and service payement stage contact three way matching approve invoic and arrang payemnt keep record Every stage Have funcation Strategic Transactional Supportive Need identification Purchase Request (PR) Depart Policies Definition Specification of requirement Purchase Order (PO) Vendor rating Market Research & Supplier Dispatch of Products by Supplier Performance Sourcing Supplier Monitoring Supplier Evaluation and Reception and Storage of Training and Development Selection the Goods Purchase Request (PR) Goods Physical Inspection Contracts (Quality Assurance) Management Contract Terms Negotiation Documents Inspection Supplier Relationship (Three-way match) Management Supplier Awarding Supplier Paymen Procurement must interface and balance internal and external relationships Types of Supplier Relationships Arm’s length Transactional and short-term Focused on price and terms without long-term commitment Co-operative Moderate term Involves working together to meet mutual goals Often involves some level of trust and shared information Collaboration More engaged and strategic Involves sharing resources and knowledge to improve processes and outcomes Partnership Long-term and strategic Deep mutual commitment and shared objectives the benefits on partnerships? The buyer Reduced lead times; Faster product and service development; Improved quality; Reduced costs. The supplier Long-term agreement; Marketing advantage; Financial stability. Reduced total cost; Improved long-term planning; Greater innovation; Lower inventory and consequently lower stockholding costs.