Question

Discuss the strategic, tactical and operational roles of the procurement / ( in logistic management )

Answer 1

Solution:

Procurement is a crucial element of any business and it's supply chain. The procurement process should be carried out effectively to ensure that the quality of materials procured are of desired quality levels of the organisation. This is why procurement has a special importance in the supply chain of the business.

Procurement is planned at 3 different levels in any business. These 3 levels are strategic, tactical and operational levels. The strategic procurement is the analysis of the procurement process as a whole and analysing the suppliers from who we can procure the materials. The cost implications, quality match and vendor agreements are conducted at the strategic level of the procurement process. Hence, all the crucial decisions of the procurement process are conducted at the strategic level.

Once the suppliers are chosen as per the requirements of strategic procurement plan, we then move towards the procurement schedule development, replenishment schedules and other tactical decisions that are necessary to ensure a smmoth procurement process. In tactical procurement stage we decide between various suppliers and and make decisions to buy a certain type of raw material from a certain vendor. Thus, such decisions are a part of tactical procurement level.

Lastly, we ficus on the operational procurement where the actual procurement takes place and activities such as quality check, inventory management, warehouse management activities are conducted. The operational level of procurement is very critical because the actual actualization of procurement takes place in the operational stage of the procurement process.

Hence, this is how the 3 different level of procurement are carried out in an organisation for ensuring an effective and efficient procurement process.