Procurement Lifecycle Management Definition
There is no one-size-fits-all definition for procurement lifecycle management (PLM), but at its core, PLM is a strategic approach to managing the procuring process from start to finish in order to achieve organizational objectives.
The procurement lifecycle includes all the steps and activities involved in acquiring goods and services, from identification of needs and suppliers through to receipt and payment. Typically, the procurement lifecycle is divided into six phases:
1. Planning and sourcing: This phase involves identifying what is needed, when it is needed, and who can provide it.
2. Request for proposal (RFP): In this phase, potential suppliers are invited to submit proposals outlining what they can provide and at what price.
3. Evaluation: Proposals are evaluated against set criteria to identify the best supplier(s).
4. Contract award: The contract(s) are awarded to the successful supplier(s).
5. Delivery: The goods or services are delivered as per the terms of the contract.
6. Closeout: This final stage involves assessing whether the goods or services have been delivered as agreed, invoicing and payments, documenting lessons learned, and archiving records.
