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Procurement may be easily defined as the process where a company buys one or several products, where products are defined as goods or services.

Output from the procurement process

  1. A one-time purchase of a product.

  2. Contractual purchase of products.

A purchase of goods originates from a demand in stock, or requirements to fulfill a customer or a production order. The procurement process is a large logistical interaction that often gets its requirements from other parts in the value chain. For instance, if a purchase has to be done as soon as possible, the terms and conditions will often differ greatly if you compare it to a repetitive contractual purchase.

Task involved in this process

  1. Maintain the suppliers

    The suppliers must be defined and handled as suppliers, with contact persons and terms & agreements etc.    

  2. Receive and process purchase requests

    The purchasing needs received from the store manager, production planner, customer responsible or others must be processed and followed up by handling requests.

  3. Complete orders

    Suppliers will follow up the requests and the purchasers will place orders, which must be processed and completed.

  4. Handle contractual terms & agreements

    Some specific products or suppliers are often more purchased than others and may be candidates for registering contractual terms & agreements upon.

  5. Reporting

    The analysis phase needs information in the form of reports and statistics to successfully follow up customers and agreements.