Introduction to Procurement and Supply
“Procurement is the process of acquiring goods, works and services, covering both acquisition from third parties and from in-house providers.
The process spans the whole cycle from the identification of needs through to the end of a services contract at the end of the useful life of an asset.”
The process spans the whole cycle from the identification of needs through to the end of a services contract at the end of the useful life of an asset.”
Source: OGC - UK Cabinet Office
Buying the goods and services that your organisation needs is called procurement and supply management.
Simply put, procurement is about agreeing the best price with suppliers, while taking into account factors like quality, quantity, time and location when we look at the options side by side.
In my experience managing procurement and supply includes a range of tasks, from getting raw materials to dealing with suppliers. Remember that the procurement team is responsible for a lot of things such as quality standards, financing purchases, creating purchase orders, negotiating price, buying goods, inventory control, inventory management, and the disposal of waste products like packaging.
I know procurement can account for up to 70% of an organisation’s revenue so cutting costs, even by small amounts, all adds up and will certainly have a big impact on your profits. We can all understand why getting it right should be a priority for any organisation.
By having a formal process to identify and appoint suppliers, with a legal contract, is much better for business rather than us just relying on people we know. You will get the best price and reduce the risk of problems in your supply chain if you insist on fair and open competition among potential suppliers. It can also cut out bad ethical practices like fraud and bribery, which can massively damage the reputation of our organisations.
I find a professional approach to procurement and supply management gives me peace of mind, leaving me free to get on with keeping my customers’ happy.
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