Procurement Process
Role of Procurement within an Organization: Procurement : A Tutorial
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Published on: Jan, 26, 2011 by: Robert Handfield, PhD
Role of Procurement within an Organization
Overview
Key Procurement Objectives:
OBJECTIVE 1 – Support Operational Requirements
OBJECTIVE 2 – Manage the Procurement Process and the Supply Base Efficiently and Effectively
OBJECTIVE 3 – Develop Strong Relationships with Other Functional Groups
OBJECTIVE 4 – Develop Integrated Purchasing Strategies That Support Organizational Strategies, Goals and objectives
Case Study
Overview
The objectives of a world-class procurement organization move far beyond the traditional belief that procurement’s primary role is to obtain goods and services in response to internal needs. To understand how this role is changing, we must understand what purchasing is all about, starting with the primary objectives of a world-class purchasing organization.
OBJECTIVE 1: Support Operational Requirements
Supporting this flow requires purchasing to:
• Understand business requirements
• Buy products and services o At the right price o From the right source o At the right specification that meets users needs o In the right quantity o For delivery at the right time o To the right internal customer
Internal customers of purchasing include:
• Manufacturing
• Physical distribution centers
• Engineering and technical groups
• Research and development
• Information technology
• Transportation and other services
OBJECTIVE 2: Manage the Procurement Process and the Supply Base Efficiently and Effectively
To manage the procurement process and supply base efficiently and effectively procurement must follow the following key steps:
• Identify opportunities
• Manage internal operations
• Achieve objectives
Identify opportunities where the procurement team adds true value:
• Evaluation and selection of suppliers o All purchases should go through the approved procurement processes o Engineering
1
Published on: Jan, 26, 2011 by: Robert Handfield, PhD
Role of Procurement within an Organization
Overview
Key Procurement Objectives:
OBJECTIVE 1 – Support Operational Requirements
OBJECTIVE 2 – Manage the Procurement Process and the Supply Base Efficiently and Effectively
OBJECTIVE 3 – Develop Strong Relationships with Other Functional Groups
OBJECTIVE 4 – Develop Integrated Purchasing Strategies That Support Organizational Strategies, Goals and objectives
Case Study
Overview
The objectives of a world-class procurement organization move far beyond the traditional belief that procurement’s primary role is to obtain goods and services in response to internal needs. To understand how this role is changing, we must understand what purchasing is all about, starting with the primary objectives of a world-class purchasing organization.
OBJECTIVE 1: Support Operational Requirements
Supporting this flow requires purchasing to:
• Understand business requirements
• Buy products and services o At the right price o From the right source o At the right specification that meets users needs o In the right quantity o For delivery at the right time o To the right internal customer
Internal customers of purchasing include:
• Manufacturing
• Physical distribution centers
• Engineering and technical groups
• Research and development
• Information technology
• Transportation and other services
OBJECTIVE 2: Manage the Procurement Process and the Supply Base Efficiently and Effectively
To manage the procurement process and supply base efficiently and effectively procurement must follow the following key steps:
• Identify opportunities
• Manage internal operations
• Achieve objectives
Identify opportunities where the procurement team adds true value:
• Evaluation and selection of suppliers o All purchases should go through the approved procurement processes o Engineering