For effective business, experts highly recommend you to carry out accurate deadlines of supplies, the volume of purchases and the stated requirements for the quality of purchased goods.
There are the following stages of the procurement process:
1. Needs analysis
The first step in the procurement management process is the requirement definition to the material and technical resources for the company’s relevant divisions.
If the range of products is changed, the nomenclature of the required material resources should be revised.
2. Assessment of requirements for purchased goods
After determining the internal customers, the requirements for a number of parameters in the supply are set, including weight, size, service level of the supplier, as well as other specifications for each item of purchased material resources.
3. Determination of the form of material and technical supply
Before identifying potential suppliers, you should answer the question: is it not more profitable for the company to produce the necessary resources by itself?
4. Supplier selection
The supplier selection is one of the most important tasks in procurement.
Search for the best supplier is carried out by collecting information about potential candidates, creating a database of suppliers, as well as evaluating the performance of the selected suppliers.
The procurement process includes the formalization of contractual relations, the transfer of resources ownership, their payment, as well as the organization of their transportation.
6. Supply control
The effectiveness of supply management is assessed as a result of compliance monitoring with the contract terms on deadlines, prices, quantity, quality and other parameters of supply and service.
7. Procurement budget development
The procurement budget preparing involves conducting appropriate economic calculations to identify the exact spendings of procedures and operations.
8. Maintaining relationships with suppliers
Establish close links with suppliers ensure company inclusion in a single micro-logistics system.
It should be noted that the presented the procurement process scheme is not the only true one. The stages of the procurement process, as well as their sequence, can differ depending on a number of factors.