Your comprehensive guide to the importance of 21st century procurement management
What is the importance of procurement management and its objectives?
The procurement function of the procurement and storage sector is an economic and commercial function governed by a set of policies and objectives, All are used to achieve the organization’s objectives and other activities. The organization, Resulting in the organization’s inability to implement its plans and programmes, Referring to the above, The procurement function can no longer be neglected in general by the public enterprise due to its importance, increased impact and role in an effective investigation. Its objectives follow the methodology and scientific basis in procurement processes, especially for modern organizations that seek to avoid future problems before they occur, improve performance levels and achieve the goals set as efficiently as possible.
Procurement management concept:
Procurement management is defined as the activities and processes carried out by project management within its management; Whether buying tangible or intangible goods
Small Business Procurement Department tasks:
Monitor the list of purchase orders and continue converting them into purchase orders. Purchases that match approved orders are executed in accordance with specifications and supply plans. Monitor purchasing representatives by requesting quotes based on specifications and quantities. Successful implementation of negotiations and procurement processes, including: Price and quality, Delivery date and payment terms. Direct monitoring of the performance of the procurement representative. Dedicated to training, developing and working with them in some procurement activities. Supervising procurement representatives to follow up on the availability of suppliers. Take appropriate action if supply plans change. Control the entry and follow-up of incoming materials close open purchase orders. Participate in the modernization process to set upper and lower limits, demand limits and supply periods for items based on consumption rates. Participate in the process of evaluating and developing suppliers and working with the direct supervisor to solve supplier problems. Adherence to the entrepreneurship policy in all small businesses internal and external transactions at the project level. Participate in finding new suppliers. Prepare monthly reports on orders and purchase orders.
Definition of purchasing and store management
The Procurement and Storage Department is defined as an integrated department responsible for planning, acquiring, storing and controlling all the organization’s needs in a way that best utilizes available resources. Provide facilities, staff and funds to serve customers within the framework specified in the organization’s overall objectives. Procurement and warehouse management activities
Store management.
Inventory control.
Definition of procurement management
It is the department that handles the procurement process to ensure the provision of raw materials,
demand and production for production sciences. The following definitions are used:
Takes into account industrial organizations, not other business organizations
And service. Ignores the elements of the management process for planning, organizing, guiding and controlling the purchase process in the organization.
The basics of comprehensive procurement management definition
Procurement activities function based on a range of internal and external environmental factors surrounding the procurement process.
The procurement process is made through the practice of administrative functions of planning, organization, guidance and control.
The overall objective of procurement management is not only to achieve its objectives, But to achieve the objectives of the entire organization by enabling cooperation between the procurement department and other departments within the organization.
5/ The Procurement Department needs an administrative body with full powers to perform various functions.
6/ The purchase process must be based on good practices.
With that in mind, The procurement function focuses on the top five decisions, As follows:
1- The amount that is right
Purchasing functions for purchasing management and stores
Complementary functions for other organization functions such as production, marketing and human resources, Etc.
The cost of purchasing the item is a large percentage of the sale value which may range from 40% – 60%
Purchase features help you make profits by reducing expenses in your purchase.
The conditions and characteristics of modern industry are reflected in the emergence of raw materials and alternative requirements, The tendency to complicate industrial products and the desire to provide comprehensive services to customers.
Purchase function objectives:
Supports the organization’s activities by providing the needs of all organizational units of materials, supplies, services, etc.
Supports the competitive position of the organization and its ability to make profits.
Achieving an economic purchase that balances supply and demand to achieve the best combination of price, quality and service considerations.
Reduce the amount you invest in stocks without affecting your organization’s needs.
Building good and continuous relationships with sources of supply.
Achieving integration with the rest of the organization.
Training and accreditation of type 2 procurement specialists
