Procurement and procurement process

Procurement And Procurement Process:
Procurement can be defined as the process of acquiring goods and services from a third-party vendor through direct purchasing, competitive bidding or tendering process while ensuring the right quality and quantity. Procurement is usually a part of input to a company, that uses the procured goods or services to make their own final product.The procurement process isn't the same for all businesses because it can vary according to needs. Every organization has a unique procurement process flow.

Steps involved in a Procurement Process:

1. Identification of Requirement:

The first step in buying something is recognizing that there is a need for. That could be buy a new item or reordering something.
It is important that all stakeholder be consulted at this stage to prevent issues later on, in the procurement process.

2.Determination of Specification of the requirements:
After the identification of a need, the exact specifics of the product or service required is to be decided. It includes technical specification or part numbers.
3.Sourcing:
Once it is determined that a specific item or service is to be bought, the procurement team has to investigate to determine the various sources that supplies the required products and services.
For repeat orders, suppliers will be a pre-existing vendor list.
For new items, suppliers will need to be thoroughly investigated, to determine their reputation, speed, quality and prices.
4. Negotiation and Finalization of Price and Terms:
For direct purchases, requests for quotes will be sent to the shortlisted vendors. The company to procure from will be selected not only on basis of price but also based on their promptness, reliability and quality. If there is a bidding or tendering process, the selection of the qualifying bids will be as per the terms and conditions set.

5. Purchase Requisition and order:

A purchase requisition generated within the company will be approved by the appropriate authority.
6. Delivery of the purchase Order:
The shipment notice is sent to the buyer wherever applicable. The delivery of the purchase order depends on the practices of the buyer and seller.
7. Expediting:
This involves creating the timeline for the prompt delivery of the requested goods or services,after factoring any unforseen delays. It may also include information on payment and delivery schedule.
8. Receive and Inspection:
When the product is supplied to the buyer it is the responsibility of the buyer to thoroughly inspect the supplied items if they match the agreed-upon purchase order.
9. Payment Process:
If the buyer takes delivery of the items, it is implied that they accepted and the payment process starts. For the payment to be made, the documents relating to the order are studied, if there are any mismatches they have to resolve them before payment.
10. Record Keeping and Review:
Both the companies, the buyer and seller maintain their records for their auditing and taxation processes. The entire process should be under continual review, in order to improve as well as settle any disputes that might have arisen.
Efficient procurement practices keep the flow of purchased goods and services quick and delay-free.