This document discusses procurement documentation and processes. It begins with objectives of understanding procurement concepts, documentation, and management approaches. Key terms are defined, including purchase requisition forms, purchase orders, quotes, and pre-approved suppliers. The evolution of procurement from purchasing to strategic partner is described. Types of procurement include direct and indirect. Documentation checklists and the five P's of effective procurement management are outlined. Improving approaches include networking, continuous learning, and measuring performance. The conclusion emphasizes efficient procurement as a strategic tool.

1. Procurement:
Documentation and Processes
BY: IZUGBOEKWE SETH CHIMEZIE
FOR: PRESTON HEALTHCARE CONSULTING LTD.
DATE: 17TH MARCH, 2017

2. Outline
Objectives
Introduction
Definition of Terms
Evolution of Procurement
Types of Procurement
Difference between Procurement and Purchasing

3. Outline – Cont.
Procurement Documentation & Checklist
Procurement Operations
Key Procurement Objective
5Ps of Effective Procurement Management
Summary
Conclusion

4. Objectives
… understand the concept of Procurement.
… understand the difference between Procurement and Purchasing.
… understand the types of Procurement.
… know the documents used in the Procurement processes /activities.
… benefit of Procurement Management process to Preston.
… approaches to improve the procurement activities.

5. Introduction
 After World War I and II and during the Industrial revolution there was mass
production and thus increase in Purchasing.
 … now the focus of Procurement is to move away from being only a cost savings
center to a growth partner
 … and also from a purchasing center to being considered as a strategic partner
 The need to align procurement objectives with that of the organization is
becoming a necessity.

6. Definition of Terms
Procurement?
Procurement Management Process?
Purchase Request Form?
Purchase Order Form?
Quote or Quotation?
Goods Received Note?
Pre-approved Supplier?
Procurement Committee ?

7. Procurement?
 Procurement is the act of acquiring, buying goods, services or works from
an external source.
 Goods (Supplies) or Services (Works) – best possible cost to meet the
needs of the acquirer in terms of quality, quantity, time, and location.

8. Procurement Management Process ?
(Procurement Process)
 ...method by which items are purchased from external suppliers.
 Managing of ordering, receipts, review and approval of items.
Specifies how the supplier relationships will be managed, to ensure a high level of
service is received.

9. Purchase Requisition Form?
 ... User department (internally used)
Requested by
Department
Description
Managers/Team Lead Signature
Date

10. Purchase Order Form?
 ...Purchasing department (externally used)
Company & Supplier’s Name
Job Title & Product Specification
Effective Date and Delivery Due Date
Delivery Terms
Payment Terms
Company and Supplier’s Signature

11. Quote or Quotation?
Good Received Note?
 ... is a receipt given to the supplier to confirm delivery or acceptance of goods by the
customer
 … document sent to a potential customer offering to sell goods or services at a
certain price, under specified conditions before purchase.

12. Pre-approved Suppliers?
Advertise (News Paper or Other Platform)
Group the applications - station by station; Good, Services and Consultants
Select suppliers according to the established criteria:
oC.A.C
oT.I.N
oCompany Account
oPast Record
oEmail compliant

13. Procurement Committee?
 ... members includes; the Procurement Manager, the Finance Manager and the CEO
 … they shall ensure integrity, transparency, adherence to the principles of best-
value-for-money, and fit-for-purpose is maintained.

14.  Reactive Buying:
 Decision based on price (Cheapest)
 Little to zero research.
 Strategic Sourcing:
Formalized information gathering to get the best possible values in the
marketplace.
Evolution of Procurement

15. Evolution of Procurement – Cont.
 Category Management:
 Presence of cross functional team work to generate procurement outcome
that fully satisfy agreed business needs.
Presence of Sourcing, Negotiation, Suppliers performance measurement
and Cost management.

16. Change Management:
Planning and implementing major organizational and Inter-organizational Changes.
Structured process to move individuals, teams and organizations to the desired state.
Evolution of Procurement – Cont.

17. Types of Procurement
 Direct Procurement:
Items that are part of finished products (raw materials)
 Indirect Procurement:
Operating resources ( Goods and Services; office supplies, consulting services and
out sourcing)

18. Differences between Procurement and Purchasing
 Procurement:
Sourcing activities, Negotiation and Strategic selection of goods and services that
are usually of importance to an organization.
 Purchasing:
Transactional function of Procurement for goods or
services (how goods and services are ordered).

19.  Procurement Processes/Purchasing Processes:
Initiation (on approved Budget):
- Justification.
Approval of request (Procurement Department, Finance, Chief Executive).
Identification of Suppliers and Interaction (Purchase Order Communication,
Negotiation, Request for Quotations)
Differences between Procurement & Purchasing – Cont.

20. Quote Analysis and Vendor Selection
Purchase Order Acknowledgement (Supplier Signs)
Advance Shipment Notice (Payment)
Goods Receipt (Goods Receive Voucher)
Payment to Supplier
Invoice Recording
Differences between Procurement & Purchasing – Cont.
Purchasing

21. Procurement Documentation Checklist – Service & Supplies
 Approved Purchase Request (with Specification)
 Copy of signed Purchase Order, BOQ (renovation contract only) and Signed Contract.
Quotations and Approved Bid Analysis (or Quote Analysis)
Copy of previous Sun System Payment Voucher

22.  Signed Procurement Committee Minutes/Report and Attendance sheet (if the
amount is within the thresh hold of procurement committee rang).
 Signed delivery notes (Supplies Only)
Signed Inspection and Acceptance form (Supplies Only)
Procurement Documentation Checklist – Service & Supplies
- Supplier's document to the user company.

23. Vendor Invoice or Request Letter for payment
Vendor Acknowledgement receipt for payment
 Approved job completion form (for Service).
Procurement Documentation Checklist – Service & Supplies

24. Procurement Operations
 Need Recognition:
whether from internal or external sources
reordered, or a new product
Specific Need:
standards to help determine specifications
- Part number, - Point of reference, - Colour or Weight.

25. Source Options:
Approved Vendor list
Or
Search using Purchase Orders or other sources (Magazine, Internet or Sales
representative)
Price and Terms:
Determine the best price and terms for the product (for commodities or
specialized material)
Procurement Operations – Cont.

26. Procurement Operations – Cont.
Purchase Order:
Use to buy a material between a buyer and seller
It defines:
o The price
o Specifications
o Terms and Conditions
o Any additional obligations

27. Key Procurement Objective
 Support Operational Requirements:
Understand business requirements
Buy products and services:
o right price,
o right source,
o right specification,
o right quantity,
o right time.

28. Key Procurement Objective – Cont.
 Manage the Procurement Process and the Supply Base Efficiently and
Effectively:
o Identify opportunities
o Manage internal operations
o Achieve objectives

29. Key Procurement Objective – Cont.
 Develop Strong Relationships with Other Groups within the Firm:
o liaison with user departments to achieve greater understanding of requirements and
integration
o Timely, pro-active communication with user Department
o Sharing of information i.e. market trends, price, quality, delivery, forecast and
demand
o Highlighting achievements

30. Key Procurement Objective – Cont.
 Support Organizational Goals and Objectives:
 Develop strategies that support organizational strategies:
o Monitor supply markets and trends
o Identify the critical materials and services required
o Support the organization’s need for a diverse and globally competitive supply base
o Develop supply options and contingency plans that support company plans
o Quality reporting as required and continued improved communication

31. Key Procurement Objective – Cont.
 Achieve Value for Money in all procurement activities
Promote innovation

32. 5Ps of Effective Procurement Management
 Proposal:
Primary document issued at the early stage of procurement process
Suppliers are invited to submit proposals to provide goods or services
…which Vendor to select?

33. 5Ps of Effective Procurement Management – Cont.
 Planning:
Decide what to buy? when to buy? what source?
Assign procurement method and the expectation for fulfillment of procurement
requirements.

34. 5Ps of Effective Procurement Management – Cont.
 Pricing:
Represents Vendors’ assessment of the value customers see in the product or
services and are willingly to pay for.

35. 5Ps of Effective Procurement Management – Cont.
 People:
Securing the right people with the right skill will ensure the success of an effective
procurement project (in line with the current and existing requirement).
 Project Management:
Managing Procurement Project ensures that purchased items are selected and
acquired according to the specifications and requirements.

36. Procurement Improvement Approaches
 Network with other colleagues working in procurement
Improve and update knowledge regularly
Follow meticulously the ethics of the profession
Measure and manage procurement performance
Continuous professional development and membership of a relevant
professional body.

37. Summary
 Decision-makers will typically face a range of different contexts, each requiring
particular management practices to deliver intended outcomes.
Decisions made and the practices deployed in these different contexts should be
seen as interdependent, because organizations are resource constrained.
 In productivity practice, the use of e-Sourcing and contract management system
that automate workflow and create/re-use standard templates to prevent “re-
inventing the wheel” will help in the Procurement activities.

38. Conclusion
 Efficient and Effective Procurement Operations has proved to be an
important strategic tool in the business models and decision making of
any organization.
 A long-life (continuous) vocational training and departmental
commitment to drive the procurement operations of an organization
to its peak will produce a healthy procurement environment.

40.  Preston Healthcare Consulting Finance Manual
 Preston Healthcare Consulting Checklist – Supporting Documentation
http:www.procurementclassroom.com
https://www.finance.gov.au/procurement/procurement-policy-and-
guidance/buying/procurement-practice/process-considerations/practice.html
https://www.cips.org/Documents/Membership/Branch%20Event%20uploads/Categ
ory%20Management%/20presentation%20by%20Dave%Porter.pdf
https://www.safaribooksonline.com/library/view/e-procurement-management-
for/9781466621190/ch015sub6.xhtml
References