How Do I Sign PPT for Procurement

How To Sign PPT for Procurement

Hi everyone. In this video let us try to differentiate between purchasing and procurement. The terms Procurement and purchasing are often used interchangeably. But here we are trying to distinguish between these 2. First let's discuss Purchasing Purchasing can be defined as : Acquiring goods for satisfying infernal needs. In some organizations, this duty is carried out by individuals or teams. But in some organizations there is separate purchasing department that takes care of purchasing activities. We have discussed the basic objective of purchasing in the five rights of procurement video. Please refer to the link provided below if you are interested to know in detail. The basic objective of purchasing is to acquire materials of right quality in the right quantity delivered to the right place at the right time for at the right price. The basic purchasing process may include: * receiving purchasing requisition from user departments * obtaining quotations from suppliers and evaluating them * placing purchase order * receiving material and making payment The term P2P cycle or purchase to pay cycle is often used to describe purchasing process. That is: placing purchase orders, expediting, receipt and payment. The role of purchasing has evolved over time and Purchasing is not just "buying inputs at best price"; it also includes process of ensuring reliable and consistent flow of goods, from market to various departments of the organization. Purchasing department can be seen as the interface between internal user and external supply market. Now let’s look at Procurement: Procurement can be seen as the process of identifying rights needs by working with various internal departments, conducting efficient Purchasing and managing suppliers. A process that contributes to competitive advantage of the organization Procurement also makes use of activities like hiring or leasing In simple terms Procurement can be defined as, the process of meeting internal needs efficiently, through purchasing or hiring or leasing or outsourcing, (etc) The procurement process may include: * supply market monitoring, identifying potential supplier, preparing approved supplier list * working with user departments in identifying right needs * converting the needs into clear accurate specifications that can be understood by suppliers * obtaining and evaluating quotations * selecting the right supplier * Efficient negotiation * contract development * contract management * Payment * Supplier relationship management We can see that, Procurement is an umbrella term, within which purchasing can be found. Which means procurement is a wider term than purchasing. Procurement is a broader process than purchasing. Procurement includes few activities prior to & few activities after, the actual purchasing. * identification of right need, Preparing clear specification , surveying market etc are some of the activities prior to actual purchasing. * supplier management , contract reviews etc are some of the activities after actual purchase Purchasing is more like reacting to the internal needs. Whereas procurement is a proactive approach. Because it includes working with user departments in identifying right needs. Procurement professionals can contribute at the product design stage by utilizing the market...