Transparency, integrity, economy, openness, fairness, competition and accountability are some of the fundamental principles of public procurement.
Purchasing: 6 Major Principles of Purchasing – Explained!
- Right Quality: The term right quality refers to a suitability of an item for the purpose it is required.
- Right Quantity: Materials purchased should be of right quantity.
- Right Time:
- Right Source:
- Right Price:
- Right Place:
Types of Procurement
| Direct Procurement | Goods Procurement |
|---|
| Examples | Raw materials, components and parts, machinery, items purchased for resale | Raw materials, wholesale items, office supplies |
Procurement thresholds apply to the aggregate (total) value of all requirements for the purchase, lease, rental or hire of goods and services of a similar type. the estimated value of separate contracts for meeting a single requirement; or.
Procurement planning is the process of identifying and consolidating requirements and determining the timeframes for their procurement with the aim of having them as and when they are required. A good procurement plan will describe the process in the identification and selection of suppliers/contractors/consultants.
Procurement is the act of obtaining goods or services, typically for business purposes. Procurement generally refers to the final act of purchasing but it can also include the procurement process overall which can be critically important for companies leading up to their final purchasing decision.
Procurement Objectives and KPI's
- OBJECTIVE 1: Support Operational Requirements.
- OBJECTIVE 2: Manage the Procurement Process and the Supply Base Efficiently and Effectively.
- OBJECTIVE 3: Develop strong relationships with other groups within the organization.
- OBJECTIVE 4: Support organizational Goals and Objective.
Explain basic procurement principles and the underlying rules that support these principles – professionalism, transparency, value for money, accountability, fairness, competitiveness etc. Apply the codes of conduct in the performance of their procurement functions.
Therefore, a well-defined procurement process can provide your organization a competitive advantages by reducing costs across the value chain; causing greater efficiency in the delivery of quality goods and services; assisting with product innovation; mitigating supplier risk; and increasing supply chain resiliency.
4 Tips to Help Procurement Prioritize Sustainable Products on a
- Establish written policies for buying products and selecting suppliers. Develop criteria for how products will be vetted, selected and purchased.
- Do your homework.
- Keep up a dialogue with suppliers.
- Recycle, reuse and focus on energy.
An effective procurement process involves in-depth understanding of requirements by all business units, identifying the right supplier for meeting those requirements, periodically evaluating supplier performance, and negotiating contracts that can provide the highest value at minimum cost.
Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement generally involves making buying decisions under conditions of scarcity.
The ground rules for good ethics in procurement are simple enough. Practice integrity, avoid conflicts of interest and personal enrichment, treat suppliers equally and fairly, and comply with legal and other obligations.
