Procurement Cycle Definition
The procurement cycle is the process that a company uses to purchase goods or services. The cycle begins when a company identifies a need for a good or service, and ends when the company receives the good or service and pays for it. In between, there are a number of steps that must be completed in order to successfully procure the desired item.
The first step in the procurement cycle is identifying a need. This can be done through either internal or external means. Internal means would involve something like a production line going down due to a lack of parts, while external means would be something like receiving customer orders for products that are not currently in stock. Once a need has been identified, the next step is to create specifications for the desired item. These specifications will include things like quantity, quality, price, delivery date, etc.
After the specifications have been created, the next step is to solicit bids from potential suppliers. This can be done through request for proposal (RFP) process, or through informal means such as contacting suppliers directly and asking for quotes. Once bids have been received, they must be evaluated in order to choose the best supplier. There are many factors that go into this decision, such as price, quality, delivery time, etc. Once a supplier has been chosen, a purchase order is issued and the supplier ships the goods or services.
Once the goods or services have been received, they must be inspected to ensure that they meet the specifications laid out in
