Going back to basics, what is procurement?

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Procurement, also known as ‘buying’ or ‘purchasing’ is the act of obtaining goods, works and services.  The aim of the procurement process is to get what we need for the fairest price possible whilst also being good quality. 

When managing a procurement process, you will likely find that your requirement falls into one of three categories; good, service or works:

Goods: Tend to have a physical presence – cars, tools for working, food or clothes.                        

Services: Are time based and usually involve a specific skill or expertise; for example, plumbing, HR or IT skills.         

Works: Includes construction, infrastructure, and landscape.

Procurement needs to be very carefully managed, as rushing into a decision can have serious consequences.  If you make the wrong decision, it can have huge negative impacts on your organisation, the surrounding community and even along the supply chain.  The smallest oversight could cost a great deal of time and money: for example, if a train is purchased but doesn’t fit the tracks.  This will cause delays, waste time, and reflect badly on the business.  

To try and combat this you must consider the processes and procedures in place within the company and seek the correct permissions, but also ensure that these processes are not too lengthy, complicated, or expensive.  One way, is to consider that they are appropriate to the value of the contract.  By proactively managing risks you can prepare for any potential issues that could arise and prepare for it rather than to reacting to it and having to scrabble to find a solution.

If your business has a clear understanding of the goods, services, or works you need already your next step is to find suppliers.  Finding the best supplier that matches your businesses is critical and if done wrong can be devastating and can have a domino effect throughout your entire business.  For example, if you don’t research your supplier in depth and they are breaking the law then your businesses could be liable.  It could have a huge backlash on the way your business is viewed.  When looking for a supplier you need to first weigh up your options.  Make a list of all the different suppliers and think about the pros and cons.

  1. Are they cheaper?
  2. Do they offer a high-quality product?
  3. Are they reliable?
  4. Do their business ethics match ours?

To become a procurement professional, you are going to need a range of personal characteristics. Having integrity and being honest will allow you to build a good rapport with suppliers which will allow you to get the best value for money. You must also be a problem solver and project manager, able to plan and adhere to governance. The ability to prioritise is critical because if there is an issue in the supply chain you must be able to adapt to these problems.

Value Match is a procurement focused business, and for those that are looking to understand the basics we offer our professional insight into procurement in our CPD accredited, online course Procurement Fundamentals.