The paper "Purchasing and Supply Chain Management - Procurement Process" is a perfect example of business coursework. Procurement is a process that involves the management of a broad range of processes that are related to the necessity of a company to acquire the goods and services required to operate the organisation or to manufacture a product. The aim of this work is to examine the importance and function of procurement in supply chain management of organisations. In this regard, several academic books, journals and authentic websites have been consulted. It is claimed by this work that organisations realise several crucial benefits by adopting the process of procurement. The hypothesis of this research work is: The major benefits obtained by procurement are; innovation, lower costs, reduced risk, greater added value, better quality, and improved efficiency. In order to achieve the aim of this research, the other objectives undertaken in this work are; inter-organisational operation of procurement as subtheme 1, intra-organisational operations as subtheme 2, and e-procurement as subtheme 3.
Under subtheme 1, the elements of procurement in the supply chain, including strategic sourcing, risk, supply chain design, and transportation have been analysed.
On the other hand, subtheme 2 examines factors, such as, product, knowledge, inventory and technology, in which an important function is performed by procurement, in order to improve the development of the organisation. Finally, subtheme 3 scrutinises the novel notion of e-procurement. Thereafter, conclusions have been arrived at. As such, this work establishes that procurement is vitally important for supply chain management, which in turn is of great benefit to the organisation in several ways. The major results of procurement are innovation, lower costs, reduced risks, improved added value and quality, and enhanced efficiency, vis-à -vis the organisation. Importance of Procurement Procurement constitutes the management of the numerous processes associated with the act of acquiring goods and services required by an organisation to manufacture a product, change inputs to outputs, or for the purpose of administering the organisation indirectly.
Some of these processes are activities, including product and service sourcing, selection of suppliers, negotiation of terms and pricing, management of contracts and transactions, management of the performance of suppliers, and issues pertaining to supplier sustainability. The business management function that ensures identification, sourcing, access and management of the external resources required by an organisation for achieving its strategic objectives is termed procurement.
The exploration of supply market opportunities and the implementation of resourcing strategies that ensure the best possible supply outcomes to an organisation, its customers and stakeholders are undertaken by procurement. This process is based upon the tenets of external resource and supply management. Identification of Desired Procurement Outcomes and Objectives The planning process has as its first step, the identification of the desired objectives and outcomes of the procurement. It is necessary to realise that this process is not invariably linear.
Thus, in some instances, the information collected during the information gathering stage will exert an influence upon the identification of objectives. For example, the supply market, upon being subjected to analysis, reveals that sources of supply are limited. This implies that a cardinal objective is to identify suppliers who can develop alternative products. As a consequence, limited sources of supply constitutes an important factor that has to be accommodated at the definition stage of the process.
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