Download as PDF, PPTX
Lecture 2 - Procurement.pdf
- 1. Topic - 2 SupplyChain and Procurement
- 2.
- 3. Procurement Definition • Procurement refersto the process of identifying, shortlisting, selecting, and acquiring suitable goods or services or works from a third party vendor through a direct purchase, competitive bidding, or tendering process while ensuring timely delivery in the right quality and quantity.
- 4. Part of anOrganization’s Corporate Strategy • Procurement is nuanced and intertwined with several core business functions, and as such, it should be considered a core component of a company’s corporate strategy. For example, if a company’s identity is based on being environmentally conscious, then the procurement specialist’s strategy must focus on engaging green suppliers. If a company has specific goals, it needs to procure the right workers to help it achieve them.
- 5. How Procurement Works • Procurementand procurement processes can require a substantial portion of a company’s resources to manage. • Comprehensively, this can involve purchase planning, standards, specifications determination, supplier research, selection, financing, price negotiation, and inventory control. As such, many large companies may require support from a few different areas of a company for successful procurement.
- 6. The Process Includes •An end-to-end procurement process consists of the steps listed below: • Surveying the market • Spotting potential suppliers • Creating an approved list of vendors • Spotting internal needs • Creating a purchase order online • Requesting proposals and evaluating quotations • Selecting the right supplier and negotiating effectively • Receiving goods and performing quality checks • Developing and managing contracts • Obtaining invoice approvals and fulfilling payment terms • Establishing a good supplier relationship
- 7. As Distinct fromPurchasing • Purchasing is the set of functions associated with acquiring the goods and services that an organization requires. Purchasing is a small subset of the broader procurement function. This process includes activities like ordering, expediting, receiving, and fulfilling payment.
- 8. Listed below arethe steps in the purchasing process: • Obtaining a purchase requisition Obtaining • Requesting proposals and evaluating quotations Requesting • Dispatching official purchase orders Dispatching • Receiving products and services Receiving • Checking the quality of delivered items Checking • Effecting payment to vendors Effecting
- 9. Procurement is mainlyUpstream
- 11. The Value of the Relationship •Note • 1.Procure to pay – relates to cash flow and invoice payment of good received. • 2. eAuction – is an electronic tendering process for goods and services.
- 13.
- 14.
- 15. A B CAnalysis of Suppliers • A – 20% of Items and 80% of Value • B – 30% of Items and 15% of Value • C – 50% of Items and 5% of Value
- 16.
- 19.
- 20.
- 21.
- 24. Supply Chain Management Purchasingand Logistics Management
- 27.