What Is The Procurement Life Cycle And Why Is It Important?
Are you curious about the procurement life cycle and why it’s essential for businesses? Procurement is a critical function that involves sourcing, purchasing, and managing goods and services. It plays a vital role in ensuring that organizations have access to quality resources at competitive prices while maintaining compliance with regulations. In this blog post, we will explore what the procurement life cycle is, its key stages, and why it is crucial for businesses of all sizes to understand it. Join us as we dive into the world of procurement!
What is the procurement life cycle?
The procurement life cycle is the process by which a company goes through in order to procure goods or services. The different steps in the procurement life cycle are research, planning, acquisition, delivery, and sustainment.
The research step involves looking into what products or services are best suited for the company. This can be done through surveys, market research, or consulting with suppliers. Planning is necessary to determine how much money will be spent on each product or service and where it should be spent. Acquisition is when a company selects a supplier or contract manufacturer. Delivery involves shipping the product or service to the customer. Sustainment is ensuring that the product or service remains effective over time.
The different phases of the procurement life cycle
The procurement life cycle is a model for the different steps that must be taken in order to procure a good or service. The model was first developed by Fred W. Kapp, and it is now used by organizations all around the world to help streamline the procurement process.
There are five main phases in the procurement life cycle: planning, acquisition, implementation, operation, and maintenance. In each phase, different aspects of the procurement process must be dealt with in order to ensure a successful outcome.
Planning is when an organization decides what it wants and needs, and how it will acquire those things. This stage can often be the most difficult because it requires lots of thought and research into potential suppliers.
Acquisition is when an organization makes an offer to purchase something from a supplier. This can involve lots of paperwork and negotiations, but ultimately it is essential that the right item is purchased at the right price.
Implementation is when the new product or service becomes reality on campus or in the field. This phase can involve a lot of training for personnel who will be using or working with the new product or service, as well as setting up systems and procedures to keep things running smoothly.
Operation is when everything is running smoothly and there are no major issues popping up. Maintenance takes care of ensuring that everything continues to run smoothly by updating policies, procedures, systems… you get the picture!
Why is the procurement life cycle important?
The procurement life cycle is a process that begins with identifying the need for a product or service, and ends with receiving and managing the necessary approvals to award a contract. Along the way, procurement professionals must take into account several factors, such as price, quality, schedule, and delivery.
Procurement life cycle phases include planning, researching, negotiating and awarding. The planning phase involves determining what type of product or service is needed and how much it will cost. Researching entails gathering information about potential suppliers and their capabilities. Negotiating determines who will provide what type of product or service at the best possible price while awarding decides who will receive the contract.