In today’s internet age, utilization of procurement services is very essential. These services can move the projects faster and can also help find better suppliers, get better prices, better service, monitor production schedules and help with the supply chain schedule and delivery process. Procurement means the process of purchasing goods, works or services at the most economical total cost, while adhering to any specific requirements.  

PROCUREMENT TYPES

Procurement activities are divided into two categories based on the consumption purposes. The first category is direct, production-related procurement in which the products bought are meant to be used as raw materials to produce other goods. In indirect procurement, products bought are used for operational purposes.

TEN MAJOR STEPS OF PROCUREMENT ARE AS FOLLOWS:

v  Purchase planning

v  Standards determination

v  Specifications development

v  Supplier research and selection

v  Value analysis

v  Financing

v  Price negotiation

v  Making the purchase

v  Supply contract administration

v  Inventorycontrol and stores

v  Disposal

PROCUREMENT PROCESS

The procurement process is a method by which items are bought from external suppliers. It includes managing the ordering, receipt, review and approval of items from suppliers. It also specifies how the supplier relationships will be managed to ensure that a high level of service is received. If the whole process is carried out on the Internet, it is called e-procurement. Procurement process can be a long and a tiring one especially where a financial risk is involved. For this reason, it is best to leave it to the professionals.

STEPS IN PROCUREMENT PROCESS:

1.      Procurer begins searching the market for bidders

2.      Request for bids, proposals, quotes and information can be made or get in touch directly with the bidder

3.      Begin quality check to confirm the suitability of the goods in question

4.      Selects the suitable bidders, a quality check is vital in order to confirm the suitability of the goods in question

5.      Negotiating terms, conditions, and quality and delivery schedules

6.      Logistics, payment are two important processes that determine the safe delivery and payoff of goods.

ROLE OF PROCUREMENT COMPANY

Procurement companies are businesses that contract with clients to locate and secure various types of resources that are desired by the client. Business procurement is used to describe activities related to purchasing of goods and services for a business entity. The field of business procurement has key focus areas of tendering, vendor managementand strategic purchasing. There are three main job titles in procurement including buyer, procurement officer and procurement manager. A buyer is responsible for managing the purchase of commodities from selected supplies. The procurement officer manages tenderingand vendor selection process.  The main responsibility of the procurement manager is the overall operation of the department and negotiations with large dollar value suppliers.

A procurement company may be structured to find, qualify, and procure specific types of resources or provide services that make it possible to locate and secure any type of items needed by the customer. Vintech Engineering Systems provides engineering and industrial procurement services. Euclid Infotech Pvt Ltd offers procurement outsourcing services and another leading procurement service provider, Source One supplements client resources with professional procurement cost reduction, strategic sourcingservices, and spend management solutions.

STEPS UNDERTAKEN BY PROCUREMENT COMPANY:

v  A procurement company will meet the client to evaluate the needs and desires of the customer

v  After agreeing upon what the company is to find and secure on behalf of the client, a period of research and investigation starts. During this phase, the procurement company will identify and evaluate the multiple sources for the goods or services desired

v  After locating and qualifying resources, a procurement company will also seek to obtain the best possible pricing for the customer

v  After agreeing to terms, the information is communicated to the customer, who can then decide whether or not to accept the terms and enter into a contractual agreement with the vendor.

v  Then comes the stage of charging money, which includes Procurement Company charging a flat rate, based on the nature of assignment. Others charge at an hourly rate.

v  Final responsibility for the contract rests between those two parties, with the procurement company acting only as a facilitator.

Thus, procurement is a process carried out by almost every company and individual for profits, personal gain, which involves buying of commodities by selecting the suitable bidder.

Artika Shah