Procurement

Management
ZAKA AWAN
Introduction
Procurement
The process of acquiring goods, services, or works from an
external source. Involves strategic planning, supplier selection, contract
negotiation, and relationship management.
Purchasing
The specific act of buying goods or services. Focuses on
transactional activities, such as order placement and payment
processing.

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Objectives and Goals
Procurement Objectives
Minimizing Costs
Ensuring Quality and Compliance
Reducing Risks
Maximizing Supplier Performance
Strategic Alignment with Organizational Goals
Purchasing Objectives
Obtaining the Right Quantity
Obtaining at the Right Time
Obtaining at the Right Price
Managing Supplier Relationships

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Procurement Process
Strategic Planning
Supplier Identification and Evaluation
Request for Proposal (RFP) and Request for Information (RFI)
Contract Negotiation and Award
Supplier Relationship Management

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Procurement Example
Example: IT System Implementation
Strategic Planning: Identifying the need for a new IT system to enhance productivity.
Supplier Identification: Researching and shortlisting potential IT vendors.
RFP and RFI: Sending out RFPs to selected vendors to gather proposals.
Contract Negotiation: Negotiating terms, pricing, and SLAs with the chosen vendor.
Supplier Relationship Management: Ongoing communication and performance tracking.

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Purchasing Process
Identifying Needs
Supplier Selection
Purchase Order Issuance
Goods/Services Receipt and Inspection
Invoice Approval and Payment

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Purchasing Example
Example: Office Supplies
Identifying Needs: Recognizing the need for office supplies like paper, pens, and printer ink.
Supplier Selection: Choosing a preferred office supply vendor based on price and reliability.
Purchase Order Issuance: Creating a purchase order specifying the items, quantities, and prices.
Goods/Services Receipt: Receiving and inspecting the delivered office supplies.
Invoice Approval: Verifying the received goods against the purchase order and approving payment.

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Key Differences
Procurement Focuses On:
Strategic Planning
Long-term Supplier Relationships
Risk Management
Maximizing Value
Purchasing Focuses On:
Transactional Activities
Short-term Transactions
Cost Efficiency

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When to Use Procurement vs. Purchasing
Use Procurement When:
Long-term Relationships are Critical
Strategic Alignment is Vital
Risk Management is Essential
Use Purchasing When:
Transactional Efficiency is Key
Cost Savings are the Primary Goal

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 Q/A

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