PROCUREMENT CYCLE
Here is a more detailed version of this video: • How the 13 STAGES OF PROCUREMENT CYCL...
Access a free month of over 38,000+ courses to help you learn new marketable skills: https://skl.sh/3h4Q7PM
The process is often cyclical. Procurement and supply cycle takes this shape
1 Understand your business needs
The first stage of the procurement process is to know exactly what the business needs since this will help you to come up with the procurement specifications.
2 Develop strategy and a plan
When developing your plan or strategy ensure that you consider the impact the external environment has. These include thinks like competitors, economic systems, social aspects, monetary, political or even legal system.
3 Pre procurement / market test and market engagement
Before going straight to the market you need to test it. Look for things like whether or not it’s the right time to procure, what are your competitors doing? What about suppliers, are their new legislation? etc.
4 Development of documentation
So now that you know what the market looks like you will have to spend time working on your tender documents.
5 Select suppliers you are interested in
Conducting a Request for Information (RFI) at this stage in the procurement cycle will help to gain insights into suppliers, size, capabilities, financials, strengths and weaknesses before assessing whether they should be included in the tender process.
6 Issue Invitation to Tender (ITT) /RFQ
Once you have selected the companies to participate a formal Invitation to Tender (ITT) and Request for quotation (RFQ) is sent out to participants, items to be included are specification and documentation developed around the business requirements along with clear timescales to respond.
7 Bid/Tender Evaluation and validation
After your potential suppliers have submitted their tenders, they have to be evaluated and validated in so as to pick the right supplier(s)
8 Contract award and implementation
Now that you have your supplier(s), the next thing is to develop a contract. This will show that both parties are fully aware and understand their obligations.
9 Warehouse logistics and receipt
Next is to have your warehouse operations in order. Things like product coding and classification, space, layout and racking, frequency of deliveries, order processing and booking in procedures to ensure an efficient process, along with any other business requirements.
10 Contract performance review and continuous improvement
Keep on assessing if the suppliers are meeting the KPIs….Remember this is a continuous process
11 Depending on the nature of procurement the final stage will be ASSET MANAGEMENT / END OF LIFE AND LESSONS LEARNT
Over time assessments will be carried out on whether the business requirements have changed, whether the agreement is still required and fit for purpose, what can be learnt from the process and how this can be incorporated to improve the process next time.
Depending on what we find out here…This cycle then begins again.
WEB SITE: www.zeritenetwork.com