Product Procurement

Procurement refers to techniques, structured methods, and means used to streamline an organization’s procurement process and achieve desired results while saving cost, reducing time, and building win-win supplier relationships. Procurement can be direct, indirect, reactive, or proactive.

Procurement activities involve obtaining products and materials from suppliers and manufacturers at competitive prices. It is a vital business function to manage your inventory and serve your customers effectively. 

The PO process allows businesses to track inventory and cost while ensuring accuracy. It can also be an important aspect of project management. Purchase orders allow you to track what vendors are providing which products or services to ensure that your project workflow is running smoothly.


Steps Involved in a Procurement Process

The procurement process involves several elements, including requirements determination, supplier research, value analysis, raising a purchase request, reviewal phase, conversion to purchase order, contract administration, monitoring/evaluation of received order, three-way matching, payment fulfillment, and record keeping. 

Here are the 7 key steps involved in a procurement process:

  • Step 0: Adding Supplier
  • Step 1: Managing Supplier contracts
  • Step 2: Adding Supplier products 
  • Step 3: Setting up a Purchase order 
  • Step 4: Adding specifics to the purchase order like the product, quantity, price, expected delivery date, etc. 
  • Step 5: Submitting PO to your supplier
  • Step 6: Managing PO approvals, product receivables, and any disputes
  • Step 7: Record keeping for the price, inventoried items, etc. 

Purchase order allows purchasing departments to confidently fill out order forms for goods and services. Purchase orders are an important part of any business. They allow you to make binding contracts via legal documents with vendors. This allows you to ensure accuracy in your ordering systems and make sure you keep your business processes on time and under budget. Integrating purchase orders in your procurement process and accounts payable can give your team members confidence in buying products and services.