Skin ADV
About   |   Newsletter
Demand & Supply Chain Management Evolution


Supply Chain Glossary

Glossary  >  P  >  Procurement  


 

Procurement


Source: Procurement Glossary
Author: Paul Rogers
Institute: CIPS - UK

Courtesy of


 

Procurement describes all those processes concerned with developing and implementing strategies to manage an organisation’s spend portfolio in such a way as to contribute to the organisation’s overall goals and to maximise the value released and/or minimise the total cost of ownership.  Procurement is a more comprehensive term than purchasing, which is more focused on the tactical acquisition of goods and services and the execution of plans rather than the development of strategies.
 
Procurement can be a department, a role and/or a process.  As a process, procurement begins with the review of the spend portfolio and the development of an opportunity analysis.  Once categories are defined, the procurement process involves identifying and engaging with potential stakeholders, defining business needs and preparing a business case.  Once the market has been reviewed, a reconciliation of the business need and the supply market character ensures that appropriate procurement strategies are developed.  Strategies may involve insourcing, outsourcing, competitive bidding, direct negotiation, and a variety of other sourcing strategies.  Once the strategy is developed, the execution will involve market engagement and the issue of the RFI and the RFP and/or negotiation.  Once offers are evaluated, the optimum solution will be selected and the appropriate contractual agreement established.
 
Procurement differs from sourcing in that the procurement process addresses all pre-contract and post-contract processes.  Supplier relationship management, performance management and supplier development are key procurement activities to realise the potential value created during the sourcing phase.

Procurement as a full-time role is a specialised job requiring a range of skills and capabilities.  Traditional analytical capability is helpful to undertake spend analysis and evaluate offers, but the ability to understand and interact with supply markets is just as important.  In terms of interpersonal skills, influencing skills and facilitation skills are just as important as negotiation skills.

As an organisation, procurement structures vary with the culture and structure of the host organisation.  Many organisations have a centre-led structure with a small central team setting policy and standards and coordinating activity, which is primarily undertaken in the spending departments. While there are no universally accepted standards, most people agree that vendor management applies to post-award processes (though some vendor managers do manage the end-to-end process apart from market engagement).  Similarly, sourcing involves all those processes up to the award of the contract.

In Europe and Asia, the term ‘purchasing’ is used to describe transactional processes such as raising purchase orders and reconciling invoices. However, in North America the term ‘purchasing’ is sometimes used to describe the whole procurement process. The procurement process in North America usually begins with the review of an organisation’s spend portfolio, and the development of appropriate strategies, and proceeds right the way through to the review of procurement arrangements and the disposal of goods at the end of their life.

Some category managers are not full-time procurement staff but functional practitioners who also undertake business planning for that discipline. For example, a company counsel may be the category manager for legal services, but also plan the size and shape of the organisation’s legal services.  Police officers with special responsibility for firearms may be the category manager for weapons.  In such cases, category management will not only comprise the application of the procurement process to a specific category, but may include elements of business planning as well.  See also Category Management and Purchasing.

 

 




Job Opportunities
 
Supply Scheduling Manager
     
     Dungarvan  -  PERM  -  GlaxoSmithKline

Regional Logistics Lead
     
     Dublin  -  PERM  -  Bristol-Myers Squibb

Interim CAPEX Category Manager
     
     Republic of Ireland  -  TEMP  -  Purcon Ltd

Customer Service and Inventory Manager External Manufacturing
     
     Dublin  -  PERM  -  Bristol-Myers Squibb

Market Supply Planner
     
     Dublin  -  PERM  -  Bristol-Myers Squibb

Inventory Controller
     
     Dublin  -  PERM  -  Bristol-Myers Squibb

Logistics Manager
     
     Armagh  -  PERM  -  Michael Page

Supply Chain Manager
     
     Dublin North  -  PERM  -  Michael Page

Production Supervisor - Tipperary
     
     Tipperary  -  PERM  -  Morgan McKinley

Buyer
     
     Cork  -  PERM  -  Morgan McKinley

Operations Excellence Director
     
     Dublin  -  PERM  -  Morgan McKinley

Planner
     
     Cork City  -  PERM  -  Morgan McKinley

Sourcing Category Manager
     
     Dublin  -  PERM  -  Morgan McKinley

Global Category Manager
     
     Dublin City Centre  -  PERM  -  Morgan McKinley

Supply Chain Manager
     
     Dublin City Centre  -  PERM  -  Morgan McKinley



 
           Circular Economy     Industry 4.0     Blockchain 

     Internet of Things     Omni Channel 


Join us on


News & Trends
 

Last update 5 Jun 2018
New order growth quickens to four-month high
   Source: Investec Manufacturing PMI Ireland  -  IHS Markit
Ireland 


Chemicals & Pharmaceuticals

Maximum safety and reliability and reducing the costs for our customers at the same time: we are able to offer the chemical industry an extensive range of chemical logistics services that hardly any other logistics specialist can match. It is our goal to harmonise our services with your specifications in s...


Get your demand planning and forecasting game on

Outplay your competition with a smarter, stronger demand planning strategy Customer demands are changing. So why isn’t your demand planning strategy? It’s time to level up your demand planning and experien...


Education
 

Local & Regional Agenda
 


Resources
 
HOYER: Future-Proofs System for Managing Intermodal Rail, Road, and Sea Transport to Meet High Growth Potential

HOYER is an independent family enterprise that dates back to 1946, and which has become one of the world’s leading bulk-logistics providers, offering comprehensive transport services and complex logistics soluti...

How software can boost global trade performance

What exactly is the benefit of using software to manage export processes? In the white paper "How software can boost global trade performance", AEB informs about facts and figures on automated export management...


International Agenda