Lecture One.pptxLecture One.pptxLecture One.pptx

Lecture One.pptx

1. Lecture One The Concept, Nature, and Types of Procurement

2. What Is Procurement? Procurement is the end-to-end business process of obtaining goods or services that a company needs for day-to-day operations. تدارکات: له هغه پروسې څخه عبارت دې چې په هغه کې یو شرکت هغه اجناس او خدمات چې روزمره ضرورت یا استعمال لپاره پکاریږي ترلاسه کوي یی. It includes identifying requirements, selecting suppliers, negotiating contracts, creating purchase requisitions (PRs) and purchase orders (POs), receiving and verifying goods, and approving supplier payments.

3. Procurement is a vital business function that, when well executed, can help increase a business’s profitability . It involves sourcing raw materials and services, negotiating terms, tracking when supplies are received, and maintaining records. It’s important to continuously monitor and assess the procurement process to improve any weak spots or inefficiencies. Technology makes procurement more effective, reduces costs, and minimizes the risk of business disruption

4. a supply chain refers to the broad process of moving goods from raw materials through production and on to the final customer ; Procurement is the piece of that process that focuses on sourcing and acquiring the necessary raw materials and services and overseeing supplier performance . Both supply chain management and procurement are strategic functions, but procurement stops short of the logistics involved in getting products or services to the end customer.

5. Nature of Procurement Procurement’s meaning in business isn't limited to simple purchasing. It includes  strategic supply chain management and maximizing the value of every single deal .

6. Why Is Procurement Important in Business? Procurement is an important step in understanding supply chains, because it helps a company find reliable suppliers that can provide competitively priced goods and services that match the company’s needs. That’s the case whether the company is seeking raw materials for manufacturing, a marketing services provider, or new office supplies

7. Types of Procurement Direct procurement:  Refers to obtaining anything that’s required to produce an end-product . For a manufacturing company,  direct procurement  includes raw materials and components. For a retailer, it includes merchandise purchased from a wholesaler for resale to customers

8. For example, if a company needs a new supplier to provide an ongoing service for an indefinite period of time, such as an email security solution. the procurement process helps the company choose the supplier that best meets all of the business’s requirements at a reasonable price . It enables the business to avoid wasting time, money, and valuable resources dealing with an inadequate supplier.

9. Minimizing cost is one important aspect of improving procurement processes. But it’s also vital to identify suppliers that provide the quality of goods and services that the company needs and have the capacity to deliver reliably and a track record of doing so.

10. Indirect procurement:  Typically involves purchases of items that are essential for day-to-day operations but don’t directly contribute to the company’s primary operations . This can include anything from office supplies and furniture to advertising campaigns, consulting services, and equipment maintenance

11. Goods procurement:  Largely refers to the procurement of physical items, but it can also include items like software subscriptions. Effective goods procurement emphasizes quality and cost controls and avoids costly supply disruptions . It may include both direct and  indirect procurement .

12. Services procurement:  Focuses on procuring people-based services . Depending on the company, this may include hiring individual contractors, contingent labor, or retaining professional services, such as legal or onsite security services . It may include both direct and indirect procurement.

13. Types of Procurement