Controlling Procurement Definition
Controlling procurement is the process of selecting vendors, negotiating contracts, and monitoring performance to ensure that goods and services are procured in a cost-effective manner. The goal of controlling procurement is to minimize risk and maximize value for the organization.
There are four main activities involved in controlling procurement:
1. Selecting vendors: Organizations should select vendors based on their ability to meet the organization’s needs at a fair price. Consideration should also be given to the vendor’s reputation and track record.
2. Negotiating contracts: Once a vendor has been selected, it is important to negotiate a contract that is favorable to the organization. This includes ensuring that prices are reasonable and that terms and conditions are favorable to the organization.
3. Monitoring performance: Once a contract has been signed, it is important to monitor the vendor’s performance to ensure that they are meeting the agreed-upon terms and conditions. This includes monitoring delivery times, quality of products or services, and invoicing accuracy.
4. Taking corrective action: If a vendor is not meeting the expectations set forth in the contract, it is important to take corrective action. This may include terminating the contract, renegotiating terms, or seeking damages from the vendor.
