Knowing More About Procurement

For those who are asking themselves "what is procurement" they should know that it's generally accepted in its basic sense as buying different things. Yet when it comes to connecting it to a business, then the definition will become more sophisticated. One of the basic definitions of procurement is:

Procurement involves the purchase of services and goods of the correct quality, appropriate quantity, from the best supplier, at the required time with optimum terms and generally using a contractual obligation.

Generally, procurement will happen on auto pilot from normal suppliers that hold a Master Agreement with a company. What this agreement is defined as is being a contract which will allow for certain services and \ or goods to be supplied at predefined terms and prices. Shortly said, it's a way that ensures the buyer and the seller will be able to do business quickly.

In some cases, when it comes to it, procurement will happen via bidding or tendering, usually in the case of massive purchases or ad hoc purchases. In this case, procurement is a staged and formalized process where a certain number of suppliers will offer their services and \ or goods to a certain number of requesters.

Stage one is when the pre-qualifying questionnaire will get to be sent to every supplier who is interested. The questionnaire will contain questions that regard the supplier's suitability of providing what the clients are requesting for. The questions will also regard the reliability and also the size of the company and the types of products and \ or services it offers.

Stage 2 involves choosing a small group of companies from these pre-qualifying questionnaires that will eventually be allowed to tender for the work. Following this will be a request for proposal which is sent out to the suppliers. The request for proposal is no more than a document in which details regarding the services and goods to be delivered will be stipulated. Not only will in it be complete details about the project, but it will also include the conditions and terms of the project.

Eventually, the suppliers will delve into producing their very own proposals which will only have the goal of answering to the needs of the requests for proposal. Next, in order to find the best supplier, they will be reviewed closely. One of the last steps of this whole process will involve a negotiation period until the final prices, conditions and terms will be typed into the formal contract.

With that being said, people now know that when it comes to procurement, it's something that can easily be described as the simple action of buying different things, yet when associated to a business, the definition will change a lot. It's important to know these differences, especially to those who are working in the marketing areas, for they will most of the times need to deal with it. Having increased awareness over it they will know the different stages it encompasses and their responsibilities in regards to it as well.

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