Procurement
Definition
Procurement is the process of acquiring goods, services or work from external sources to
meet an organization’s needs.
Procurement Process
1. Need identification
2. Specification development
3. Supplier selection
4. Contract negotiation
5. Purchase order management
6. Receipt and inspection
7. Payment processing
Types of Procurement
1. Direct procurement ( Goods and Services )
2. Indirect procurement ( Non Core Goods and Services )
3. Capital Procurement ( Large scale investment )
4. Services Procurement ( Consulting, Training etc )
Procurement Methods
1. Competitive bidding
2. Negotiated Procurement
3. Sole Sourcing
4. Emergency procurement
5. Electronic Procurement ( e-Procurement )
Procurement Tools & Techniques
1. Request for Proposal (RFP)
2. Request for Quotation (RFQ)
3. Tendering
4. Auctions
5. Supply Chain Management Software
6. Contract Management Software
Benefits of Effective Procurement
1. Cost Saving
2. Improved quality
3. Reduced Risk
4. Enhanced supplier relationships
5. Increased Efficiency
6. Better decision making
Challenges in Procurement
1. Supply chain disruptions
2. Price volatility
3. Quality control
4. Regulatory compliance
5. Supplier Reliability
6. Communication Breakdowns
Best Practices in Procurement
1. Develop clear specifications
2. Conduct market research
3. Foster Supplier Relationships
4. Implement Effective Contract Management
5. Monitor and evaluate performance
6. Ensure transparency and accountability
Procurement Matrics
1. Spend Analysis
2. Procurement Cycle Time
3. Supplier performance metrics
4. Cost saving ratio
5. Procurement return on Investment (ROI)
Procurement Certifications
1. Certified Professional in Supply Management (CPSM)
2. Certified Purchasing Professional (CPP)
3. Certified Supply Chain Professional (CSCP)
Procurement software’s
1. SAP
2. Oracle Procurement Cloud
3. Coupa Procurement
4. Procurify
5. Tradeshift
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