Question

do some research on a typical procurement process and explain it in one page or more

Answer 1

Procurement refers to processes, organized procedures, and means used to streamline the procurement process of an company and produce desired outcomes while reducing money, cutting time, and creating win - win supplier relationships. Procurement, in essence, may be overt, indirect, reactive or proactive.

Whatever the uniqueness, every procurement management process is made up of 3 Ps, namely Process, People, and Paperwork.
1. ProcessThe list of guidelines to be followed when the goods / services are inspected, ordered, purchased and paid for. Checkpoints / steps are increasing with the purchase complexity.
2. People They are partners in the procurement process, and are their unique responsibility. They take note that every stage of the process is initiated or approved. The number of participating stakeholders is directly proportional to the purchasing risk and interest.
3. Paper This refers to the paperwork and documents involved in each stage of the procurement process phase, all of which are collected and processed for purposes of reference and audit.

Each procurement management process includes many elements, including requirement identification, supplier study, value analysis, purchase request raising, review phase, purchase order transfer, contract administration, order receipt monitoring / evaluation, three-way matching, payment fulfilment, and record keeping. Below are the main stages in the procurement flow:

Phase 0: Identification of Needs The first phase in a procurement process is identification of a product's need. If it's a brand new order or a repeat transaction, demands are assessed and the inventory is double checked before making a transaction request.

Phase 1: Contract Requisition A procurement process usually begins with a request for contract. The requester sends the buying department a request for procurement (paper, electronic, or telephone form).

Phase 2: Analysis of order Then the procurement / finance department reviews the purchasing order. Authorized applications become POs, while rejected applications are sent back to the requester with the grounds for refusal

Phase 3: Budget Approval In businesses, once a PO is submitted by the procurement team, approval of the budget is sent to the accounting department.

Phase 4: Quotation Requests After the budget has been accepted, the procurement department must forward multiple quotation requests (RFQs) to vendors with the goal of obtaining and matching shortlist proposals to the right vendor.

Phase 5: Negotiation & Contract Once a vendor is chosen, the contract negotiation and signing will be completed and the purchase order will be submitted to the vendor afterwards. A legally binding contract unlocks right after a vendor recognizes and approves a PO.

Phase 6: Receive Goods / Services The vendor provides the goods / services provided within the stipulated timeline. After receiving them, the purchaser examines the order and notifies the vendor of any issues with the received items.

Phase 7: Three-way Matching In this phase, three documents purchase orders, packaging slips (which arrive with the order), and seller invoices are matched and reconciled to identify inconsistencies and ensure consistency of transaction. Discrepancies once found should be resolved.

Phase 8: Invoice Approval Payment When three-way matching is complete, the invoice is accepted and forwarded in compliance with organizational requirements to the payment processor.

Phase 9: Record Keeping During the payment process, buyers make a bookkeeping and audit record of it. All related documents are kept at a centralized location right from the purchase requests to accepted invoices.