a)

Procurement; is the acquisition of goods/services and works which may involve buying,
purchasing, leasing, renting and disposal of asset. Also, the five rights this are the factors or
general criteria that measure the procurement performance of an organization, so the following
are the five rights of procurement.

i) Right quality;
Procurement organization must ensure that they purchase goods, services or works that
can
satisfy the needs of an organization or users. Quality of goods can be achieved by
ensuring procurements officers / department of an organization acquire the accurate
specifications of goods. If the right quality is not achieved, then, stock may have to be
rejected, production machinery may also be damaged.

ii) Right quantity;

This is obtaining goods with insufficient quantity to meet the demand and maintain
service level while minimizing excess stock holding which (incurs cost and risks). The
organization must purchase sufficient quantity of material in order to meet the demand of
an organization. If the right quantity is not achieved, then insufficient stock maybe held
to meet demand, excess stock may be ordered and/ or held up capital in idles stock,
wasting storage space, risking, deterioration and theft.

iii) Right place;

Having goods delivered to the appropriate delivery point, packaged and transported in a
such a way to secure their safe arrival in good condition. This is made possible by
distribution planning, transport planning and packaging. If the right place is not achieved,
goods may be delivered to the wrong place, resulting to delays and correction costs. Also,
goods may be subjected to unnecessary transport and handling (as well as related costs).
Goods may be damaged, contaminated or stolen in transit, transport may cause
unnecessary environmental damage hence these are effects when the right place is not

1
 achieved.

iv) Right time;

Securing the delivery goods at the right time to meet demand but not so early as to incur
unnecessary inventory cost, this is by planning the demand management and supply
management. If the right time is not achieved, goods may be delayed causing production
bottlenecks (and associated costs) or delay in delivery of customers (cost of damages,
loss to the business) or goods may be too early causing undue risks and costs of holding
inventory.

v) Right price;
Securing of all above at a price which is reasonable, fair, competitive and affordable.
Minimizing procurement cost in order to maximize profits; this is by maintaining and
controlling the price analysis, supplier cost analysis and competitive pricing and
negotiation. If the right price is not achieved; supplier swill be free to charge what they
like without checking suppliers profit margins will be squeezed unfairly leading to
insecurity of supply. Materials and supply cost will rise while profits will or prices
charged to customers will have to rise resulting in a loss of sales. Material and supply
cost will rise also, there will be less profit to motivate shareholders to invest in the
business.

Generally; Organizations must ensure they follow these rights of procurement during
procurement process, because failure to follow that principle can cause an organization to
fail to reach their goals.

2
b)

i) Financial stability;
Procurement organization must know the financial status of needed supplier by evaluating
the credit reports that contain the financial status information and also show the experience of
supplier and its facilities. Evaluation team. Will typically evaluate the different financial
ratios that determine whether a supplier can invest in resources, pay its suppliers and its
workforce and continue to meet its debt and financial obligations.
ii) Technical capability;
Before selecting a supplier, procurement organization should know the technical capability of
the selecting supplier if they have modern tools that can simplify the process also if they have
professional people. Suppliers should have to update and have capable products as well as
process technologies to produce the material needed, when buying organization expects
supplier to perform component design and production it should also asses the suppliers
design capability.
iii) Supplier performance;
In fact, performance of supplier will be determined the procurement organization should
check the previous performance of supplier that has conducted by other organization, through
that performance organization can choose the right supplier. Supplier must be able to back up
their products by providing good services when needed, example when product information
or warranty service is needed suppliers must respond on a timely basis.
iv) Risk;
Every business has risk so procurement organization should make sure that when selecting
supplier have to minimize the risk that can occur during the work time, risks happen when
there is inadequate needs analysis, this is by knowing your needs, when you need them and
how you will satisfy them, poor supply, chain management, inefficient contract management
and analyze spending patterns.

3
v) Level of providing services;
Procurement organization should know the level of service that a supplier provides. The
organization may also need to consider whether the supplier has the capacity to fill orders if
needed however, product quality should consistently meet specified requirements since it can
directly affect the quality of finished goods.

REFERENCES

Abouzeid E, 2019 procurement and supply management, London, holder education.

Benton, W.C.Jr & Mc Henry, Linde F (2010).“Construction purchasing and supply chain
management: New Delhi ; Tata MCGraw Hill.

Carter, R.J (1989) “stores management and related operations" The M&E handbook series,
second edition.

Lysons,K (2000). Purchasing and supply chain management, fifth edition. Printed in great
Britain: Henry ling limited Dorchester, Dorset (Prentice hall).

HCM 343 PROCUREMENT & SUPPLY MANAGEMENT.

Menon. K. S (1993). Purchasing and inventory control. Wheeler publishing: India Third edition.