Procurement is the acquisition of merchandise or commodities by a business, organization, institution, or a person. This simply means purchasing products from suppliers at the lowest possible price. The best way to do it is to allow the providers compete with each other so the expenses of the purchaser are kept at a minimum. Procurement usually involves a Bidding process where the bidders or sellers estimate their prices and the buyer takes the lowest possible bid. This is the most efficient and economical way of procuring goods or services if the quality of the goods matches the buyers’ requirement.
The process of procurement usually starts when the procurer begins to search the market for bidders. After identifying the providers, a request for bids, proposals, quotes, and advice can be made. However, direct contact with bidders may also be made rather than marketing the above requests. After selecting the suitable Bidders, an excellent check is essential so as to validate the suitability of the goods in question. The next step will be discussion of the terms, conditions, quality, and delivery programs. Logistics and payment would be another two major processes that determine the secure shipping and the payoff of products.
If this whole process is carried out on the World Wide Web, then it could be known as-procurement. The massive market that is accessible on the web provides numerous and unparalleled opportunities for buyers and sellers alike. This makes it a really popular tool for exploring and consulting for the acquisition of products or services. The whole process of Procurement should be carried out in accordance with the present laws to be able to avoid any legal hassles. There are many consultants online who provide advice and education concerning the procurement process procedure.
The procedure for procurement may differ slightly from one firm to another, but the process is usually symbiotic in nature. It benefits both the buyer and the vendor. According to an article At Supply Management this week, the head of procurement at Newcastle University is hoping to reach a #2.5m economy in procurement prices this year after the university’s move to digital processing. With an annual budget of approximately #160m, the choice was made in 2009 to move from a system Neil Addison known as arcane, the new system coming online in 2011 and leading to a saving of #1.7m of savings in the initial year. From KPMG’s newspaper The Power of Procurement – Not too long ago, Procurement has been thought of as an add-on agency… Today however, many executives are looking to Procurement to engage the company in strategic discussions about how the supply chain can be optimized to provide the best returns.