Aspects of Procurement and Supply

Principles of Procurement and Supply

Procurement is the process of finding, acquiring, buying goods, services or works from an external source.
Includes activities like market research, vendor analysis, negotiation, and contract management.
Outsourcing and insourcing are two procurement strategies, where insourcing refers to the process of performing tasks in-house, and outsourcing involves delegating tasks to third parties.

The Procurement Manager is responsible for selecting vendors, negotiating contracts, and purchasing goods and services in alignment with the company’s objectives.
The team, under this manager, is responsible for day-to-day procurement activities such as order fulfilment and inventory management.

Supply chain management focuses on coordination and collaboration among suppliers, intermediaries, third-party service providers and clients.
It involves the integration of procurement with other business processes, like production, delivery, and return of goods.
Streamlined supply chain management can lead to improvements in both efficiency and cost-effectiveness.

This involves long-term planning for procurement, including assessing demand, supply market analysis, and total cost evaluation.
Strategic procurement aligns procurement strategy with overall business strategy.
Supplier relationship management, a key aspect of strategic procurement, focuses on maintaining healthy and beneficial relationships with crucial suppliers.

Contracts in procurement generally contain key elements such as the details of the service or product, pricing, delivery details, payment terms, and terms for dispute resolution.
Understanding and managing these contractual aspects is crucial to successful procurement.

Ethical procurement refers to making procurement decisions that not only benefit the organization financially but also take into account social, ethical, and environmental implications.
Sustainable procurement involves considering the environmental impact of the goods or services being procured, and opting for options that can reduce harm to the environment.
Both of these aspects highlight the growing importance of a broader approach to procurement, taking into account factors beyond merely cost and quality.

Technologies like e-procurement, ERP systems, and AI can significantly enhance procurement efficacy and efficiency.
Real-time analytics, predictive analytics, and other data-driven approaches can contribute to more informed procurement decisions.