What is a procurement plan?

The procurement plan is part of the strategic procurement plan and is specifically focused on the short-term activities of the procurement organization to implement the procurement strategy. A procurement plan refers to the procedures, guidelines, and actions that an organization follows to acquire goods and services.

The procurement plan explains what needs to be procured, when and how it should be done, who is responsible for the various procurement activities, and what budgets are available for these activities. The goal of a procurement plan is to streamline procurement processes, control costs, and ensure the quality and delivery of products and services.

A well-structured procurement plan helps organizations control and save costs by providing clarity on budgets and expected expenditures. This prevents unplanned purchases and overspending. By clearly defining procedures and responsibilities, a procurement plan can help accelerate procurement processes and increase efficiency. This reduces delays and ensures smoother operations within the organization.

A procurement plan identifies potential risks, such as dependency on a single supplier, and proposes strategies to mitigate these risks. This helps ensure continuity and avoid disruptions in the supply chain. Documenting specifications and quality criteria in the procurement plan ensures that only products and services of the required quality are procured. This helps maintain standards and customer satisfaction.

Additionally, a procurement plan aids in building and maintaining good relationships with suppliers. It defines clear agreements and expectations, leading to better negotiation positions and collaboration. Moreover, the procurement plan ensures that all procurement activities comply with relevant laws and regulations, helping to prevent legal issues and fines.

By aligning procurement strategies with broader business objectives, a procurement plan helps organizations achieve their strategic goals. This can contribute to innovation, sustainability, and market position.

Another component of the procurement plan is a section that outlines control objectives and corresponding control measures. Based on the main objective of the process, you define the control objectives for each subprocess. It must be clear how these contribute to achieving the overall process objective.

Next, you determine which control measures ensure that the objectives are met. This is all summarized in a risk-objective-control matrix, where procurement-related risks, objectives, and associated control measures are explicitly documented.

A procurement plan therefore helps optimize an organization’s procurement processes, control costs, minimize risks, and ensure quality and compliance. It serves as a guide for efficiently and effectively managing all procurement activities within the organization.

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