When most people think of procurement, they think of the process of buying goods and services. However, procurement is much more than that. It is the strategic process of obtaining goods and services in a way that optimizes value for the organization.
The first step in procurement is to define what the organization needs. This includes understanding the organizational objectives and determining what goods and services are required to meet those objectives. Once the organization understands its needs, it can begin to identify potential suppliers.
A supplier is any company or individual that can provide the goods or services that an organization needs. The selection of suppliers is a critical part of procurement because it can have a major impact on both the cost and quality of the goods and services procured. Organizations should carefully evaluate potential suppliers to ensure they are capable of meeting the organization’s needs.
Once potential suppliers have been identified, organizations can begin to request quotations. A quotation is a document that contains an estimate of the price and terms for supplying goods or services. Organizations typically request quotations from multiple suppliers in order to get the best price possible.
After receiving quotations from potential suppliers, organizations will select a supplier based on a variety of factors including price, quality, delivery time, and others. Once a supplier has been selected, a contract will be created that outlines the terms and conditions under which the goods or services will be supplied.