RIGHT

Quantity

RIGHT
RIGHT
Quality The Price
5R
of procurement

RIGHT RIGHT
Time Sources

Maria Listiyani
 1. Right Quality
The objective of procurement should be to achieve
right quality and not the best quality.

If the right quality is not achieved the organization

may incur high costs, the product may get returned
or rejected and the goodwill of the company may
have lost. Therefore, achieving right quality is so
important.

Maria Listiyani
 2. Right Quantity
Buying more quantities irrespective of your current
needs is not a good procurement practice. Buying
excess quantity will result in more fund blockage,
incurring holding cost, excess cost of handling and
storage of inventory and risk

Maria Listiyani
 3. Right Price
Procurement professionals are taught to aim for a
competitive price.

The quality comes with a price so the organizations

should be willing to pay the right price for the right
quality. The concept of price may also include the
concepts like ‘Life Cycle Costing’ or ‘Total Cost of
Ownership’

Maria Listiyani
 4. Right Time
Suppose we want a particular quantity of raw
material in three months for manufacturing final
product. Getting it early will incur extra cost for
handling and storing the raw material. The risk of
damage of the material will also increase.

Maria Listiyani
 5. Right Sources
Example if a builder is constructing a huge
residential project then procuring sanitary items
from small venders or involving middlemen for
procurement of such items will not be cost
effective.
In this case the builder will have to approach a large
manufacturer of sanitary items to get the best
wholesale prices. It will be also appropriate to use
negotiation tactics to get the right prices.

Maria Listiyani
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