What is a procurement process?

The procurement process encompasses all the steps and activities necessary to obtain goods or services from suppliers, from supplier selection to invoice payment. This includes identifying needs, searching for suppliers, negotiating terms and prices, placing orders, receiving goods or services, and managing supplier relationships.

The goal of the procurement process is to obtain the best value for the organization, considering factors such as quality, price, delivery time, and risks. Following a standardized procurement process allows the procurement manager to focus on what matters most: planning and setting more accurate procurement targets.

By adhering to a structured procurement process, organizations can control and optimize the costs of goods and services. This can be achieved by securing favorable prices, negotiating contracts, and identifying suppliers with the best price-quality ratio. A well-structured procurement process ensures that organizations receive high-quality products and services that meet required specifications and standards. This helps to guarantee the quality of final products or services and promotes customer satisfaction.

Implementing a thorough procurement process allows organizations to reduce risks associated with suppliers, such as delayed deliveries, quality issues, or supplier errors. This helps prevent operational disruptions and ensures business continuity. The procurement process also enables organizations to communicate effectively with suppliers, build relationships, and develop partnerships. By maintaining good relationships with suppliers, organizations can benefit from improved delivery schedules, better terms, and even innovative solutions.

A structured procurement process also helps organizations comply with laws and regulations, such as legal requirements, ethical standards, and internal policies. This minimizes legal risks and reputational damage that can result from non-compliance.

In summary, an effective procurement process significantly contributes to the operational efficiency, competitive advantage, and long-term success of organizations.

Sustainable success through manageable and controlled growth

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The comprehensive ICR cycle