BBDS2033 PROCUREMENT MANAGEMENT

Tutorial 1

1. Compare and contrast procurement with purchasing.

Procurement more toward proactive buying. Procurement can add value to the company rather than
wait for the supplier provide the specification to buyer, buyer will take initiative contribute to
specification through the supplier. To be proactive procurement, buyer not just pay money to the
seller and seller not just doing the work for the buyer. They are more concentrate into mutual
relationship in order to build mutual benefit between both buyer and supplier. For example, buyer
will share information to seller and seller will provide the better feature or quality of product to the
buyer.

Purchasing are more toward reactive buying. Purchasing is a cost center. Purchasing receives the
specification from the supplier, they will look into what specification supplier can provided and
choose the most suitable product based on the supplier specification.

2. Discuss the essentials of procurement to an organisation.

3. “The roles of procurement are changing as from the past into the future”. Discuss this
statement.

4. Is purchasing or procurement a service activity? Explain your finding.

5. Explain the use of procurement positioning tool (4 categories/quadrants matrix) to determine

and assess the risks and profit potential in an organisation.

6. Explain the various risk factors and the relevant strategic and/or tactical approaches required to
overcome or reduce these risks in procurement.

Experience with the product