Procurement

The act of obtaining services. The process includes preparation and processing of a demand as
well as the end receipt and approval of payment. Procurement is most commonly associated with
businesses because companies need to solicit services or purchase goods, usually on a relatively
large scale. It’s a purchasing process that controls quantity, quality, sourcing and timing to ensure the
best possible total cost of ownership.

Procurement Services is dedicated to ensuring that all supplies, materials, equipment and
services are procured at the lowest possible cost being defined as the optimum combination of price,
quality, availability, and services. It often involves:

 purchase planning
 Standards determination
 Specifications development
 Value analysis
 Price negotiation
 Making the purchase
 Supply contract administration
 Inventory control and stores
 Disposals and other related functions.

The process of procurement is often part of a company's strategy because the ability to purchase
certain materials will determine if operations will continue.

How Procurement Works

Procurement can be a substantial portion of a company’s resources to manage. Its typically

provide managers with a specific value they can spend to procure the goods or services they need.
The process of procurement is often a key part of a company's strategy because the ability to
purchase certain materials or services can determine if operations will be profitable.

Procurement processes will be dictated by company standards often centralized by controls from
the accounts payable division of accounting and it includes the preparation and processing of
a demand as well as the end receipt and approval of payment.this can involve purchase planning,
standards, specifications determination, supplier research, selection, financing, price negotiation, and
inventory control.

Two basic types of procurement:

Direct Procurement - which involves the purchase of raw material inputs to be converted into
finished goods or services.

Indirect Procurement - refer to provide products and services that companies need to support and
enable production processes but are not what is produced and shipped to customers.

There are mainly six types of procurement these are:

Stock procurement - offers high flexibility to the customers, but the procurement costs tend to be
higher.
Single procurement - triggered by a specific customer order and initiates the suppliers process of
production.
Vendor Managed Inventory (VMI) - A crucial premise to achieve optimized processes, lower costs
and high flexibility is a close network with the supplier.
Just in time procurement - For a successful implementation of just in time procurement it is very
important to install and build up an operating, close network.
Just in sequence procurement - It is extended by the supply of goods in the required sequence at a
defined time. This leads to a very efficient and lean way of procurement.
Ship to line - The goods are directly delivered from the last value added process of the supplier to
the first value added process of the customer.

Procurement Administrator Duties and Responsibilities

Procurement administrators can work for many different organizations, which can affect the
duties they carry out. typically include:
Monitor Inventory Stock - A key part of this job is monitoring inventory stock. Negotiate with
Suppliers - work with suppliers to negotiate material and order costs, and compile cost reports for
invoices.
Prepare Purchase Orders - Procurement administrators prepare purchase orders and send order
requests to suppliers.
Resolve Order Problems - If issues arise with shipments or orders are incorrect or late, procurement
administrators work with the supplier to resolve the issue.
Update and File Records - Procurement administrators perform inventory and forwarding invoices,
updating databases, filing, and organizing documents for accounts.

Procurement Administrator Skills

Procurement administrators are organized and experienced with administrative tasks. They’re
comfortable liaising with external companies and have good math skills. Typically, employers
require a high school diploma and business administration skills, as well as the following abilities:

Organization skills – record keeping is a key part of this job, as is monitoring inventory and other
administrative duties; strong organization skills help procurement administrators track orders and
keep accurate records
Time management – procurement administrators need to prioritize tasks to ensure deadlines are met
and verify that orders come in when expected
Teamwork – procurement administrators work closely with other departments and external suppliers,
so they must maintain a professional and helpful demeanor
Customer service – procurement administrators work with suppliers to resolve shipping issues and
negotiate material costs, so strong customer service skills are advantageous to this aspect of the role
Computer knowledge – basic computer skills are important for procurement administrators to
update records, respond to emails, and carry out data entry task.

Read more: https://www.jobhero.com/procurement-administrator-job-description/

Read more: https://www.rit.edu/fa/procurement/
Read more: http://www.businessdictionary.com/definition/procurement.html
Read more:
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.ht
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Read more: http://en.ecommercewiki.info/logistics/supply_chain/types_of_procurement