Procurement is a multi-stage process, often visualised as a cycle

Procurement is a multi-stage process, often visualised as a cycle

  1. Needs Identification & Requisition: A department identifies a need and formally requests the purchase (e.g., through a Purchase Requisition).
  2. Sourcing & Supplier Selection:
    • Market Research: Identifying potential suppliers.
    • RFx Process: Using tools like Requests for Information (RFI), Requests for Quotation (RFQ), and Requests for Proposal (RFP) to gather and evaluate supplier bids.
    • Supplier Evaluation: Assessing suppliers based on cost, quality, financial stability, and other criteria.
    • Negotiation: Finalizing terms, prices, and service level agreements (SLAs).
  3. Contract Management: Creating, executing, and managing a legally binding contract that protects the organisation and outlines all agreed-upon terms.
  4. Purchase Order Processing: Issuing a formal Purchase Order (PO) to the selected supplier, which serves as an official commitment to buy.
  5. Goods Receipt & Inspection: Receiving the goods or confirming the service delivery, then inspecting them for quality and quantity.
  6. Invoice Processing & Payment (Three-Way Match): Matching the invoice from the supplier against the Purchase Order and the Goods Receipt note to ensure accuracy before payment is approved.
  7. Supplier Relationship Management (SRM): Ongoing management of supplier performance, fostering collaborative relationships, and conducting regular reviews