Procurement Process

Specifying and Planning

Establish the product or service need, set the specifications for the product itself and conduct planning, or forecasting, based on existing data and projections, for when and how the product is ordered or reordered through approval process. Key Points..

Identifying and Selecting Suppliers

Identify and select a supplier to meet product needs, either from established relationships with approved vendors or preferred suppliers or by researching new suppliers and sending out an RFx: a request for information/proposal/quotation. Key Points..

Negotiating and Contracting

Negotiate the best price and terms for the product through competitive bidding from suppliers with their quotes and then direct negotiations to clearly communicate requirements and set expectations. With all terms agreed upon, finalize and sign the supplier contract. Key Points..

Placing the Purchase Order

The purchase order (PO) specifically defines the price, product specifications, and all terms and conditions of the product and/or service being supplied. It also serves as the “source of truth” of the product being procured for various impacted business units. Key Points..

Expediting

Expediting the product order is sometimes necessary (i.e. earlier than expected product obsolescence, a schedule change, etc.). Examining the timeliness of deliveries during this step can reveal underlying issues to address, such as lack of clarity on payment dates, delivery times and completion of work. Key Points..

Receipt and Inspection of Purchase

Review all orders against the established specifications and quality standards and conduct “a three-way match” of the PO with the invoice and the packing slip/receiving document. If what was delivered does not meet the standards specified, completing a receiving discrepancy report may be part of this step. Key Points..

Invoice Clearing and Payment

Align purchasing and accounts payable to complete the process of buying the product after inspection and confirmed document alignment (PO, invoice, packing slip/receiving document).. Key Points..

Maintaining Records and Relationships

Retain all proper records in the case of an audit, for tax information, to confirm product warranty and for ease of product re-ordering. Provide data and feedback to the supplier based on key performance indicators to identify areas for improvement and/or needed changes in the product or the supplier contract. Key Points..