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    Global Sourcing

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    Mihir Panchal
    The procurement department is responsible for managing purchasing activities and obtaining supplies needed by the organization. It identifies requirements, advertises tenders, evaluates bids, awards contracts, and ensures supplies are delivered on time. This helps minimize costs by negotiating lower prices, maintaining regular maintenance to extend equipment lifespan, eliminating middlemen, finding used items, and strategically analyzing purchasing needs and supplier markets. Effective procurement strategies can significantly reduce production costs and prices of finished products.

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    © All Rights Reserved
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    Global Sourcing

    Uploaded by

    Mihir Panchal
    131 views13 pages
    The procurement department is responsible for managing purchasing activities and obtaining supplies needed by the organization. It identifies requirements, advertises tenders, evaluates bids, awards contracts, and ensures supplies are delivered on time. This helps minimize costs by negotiating lower prices, maintaining regular maintenance to extend equipment lifespan, eliminating middlemen, finding used items, and strategically analyzing purchasing needs and supplier markets. Effective procurement strategies can significantly reduce production costs and prices of finished products.

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    The procurement department is responsible for managing purchasing activities and obtaining supplies needed by the organization. It identifies requirements, advertises tenders, evaluates bids, awards contracts, and ensures supplies are delivered on time. This helps minimize costs by negotiating lower prices, maintaining regular maintenance to extend equipment lifespan, eliminating middlemen, finding used items, and strategically analyzing purchasing needs and supplier markets. Effective procurement strategies can significantly reduce production costs and prices of finished products.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    131 views13 pages

    Global Sourcing

    Uploaded by

    Mihir Panchal
    The procurement department is responsible for managing purchasing activities and obtaining supplies needed by the organization. It identifies requirements, advertises tenders, evaluates bids, awards contracts, and ensures supplies are delivered on time. This helps minimize costs by negotiating lower prices, maintaining regular maintenance to extend equipment lifespan, eliminating middlemen, finding used items, and strategically analyzing purchasing needs and supplier markets. Effective procurement strategies can significantly reduce production costs and prices of finished products.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    What is role of Procurement

    department in an Organisation?
    &
    How can they help in minimizing
    price of finished product?
    1

    Group Members
    Names
    Vaibhav Kadam
    Mihir Panchal
    Niyaz Khan
    Manu Shaji
    Pratik Tantia

    Roll no.
    04
    08
    18
    20
    31

    Introduction

    Procurement :- The action of obtaining or procuring


    something

    A procurement department is responsible for managing the


    purchasing activity for the organization.
    In a procurement department, the director is responsible for
    strategic planning, policy development, and providing
    procurement advice to senior management.
    3

    Procurement Process
    Identificatio
    n of
    requiremen
    t

    Advertise
    requiremen
    t

    Expression
    of interest

    Tender
    document
    produced

    Contract
    Manageme
    nt

    Contract
    Implemente
    d

    Contract
    Award

    Tender
    Evaluation

    How it works/ Example


    Procurement may be a simple purchasing arrangement with a supplier. It may
    also involve a more complex arrangement with the seller or a group of
    suppliers that ties required quantity, quality, and delivery into a production
    process.
    The stages of procurement include information gathering (i.e. who are
    potential suppliers),
    Supplier contacts (i.e. gathering information about the potential suppliers,
    Background reviews (i.e. vetting, screening, checking references of potential
    suppliers),
    Negotiations (i.e. setting the price and terms), fulfilment (i.e. delivery and
    installation), consumption,
    Maintenance, and disposal (i.e. monitoring the actual delivery and use of the
    supplies or equipment),

    Example
    Direct procurement systems involve the integration of
    purchasing into a company's supply-chain
    management system, delivering the right supplies at
    the right time.
    This procurement method is classified in manufacturing
    systems as "just-in-time," which minimizes inventory
    holding costs and ensures the smooth delivery of
    supplies needed in the manufacturing process.

    Role of Procurement
    department
    To procure required services, materials, equipment, and
    construction while ensuring that quality, safety, and costeffectiveness are achieved.
    Assessment of demand or description of need
    Selection of sources of supply
    Receiving of quotation
    Placing order
    Making delivery possible at the proper time by following
    up the orders.
    7

    Role of Procurement
    department
    Verification of invoices
    Inspection of incoming materials
    Meeting transport requirements of incoming and outgoing
    materials
    Maintaining purchasing records and files
    Reporting to top management
    Developing coordination among other departments
    Creating goodwill of the organisation in the eyes of the suppliers.
    8

    How can they help in


    minimizing cost?
    AdvertisingCheck online media marketing versus traditional advertising. See if businesses in
    your neighbourhood can team up with you to get better prices from advertisers.
    Trucking and Shipping ExpensesDeduct costs for your car or truck in your business.
    Contract LabourConsider contractors. Often, it can reduce costs to contract as opposed to hire
    full-time employees.
    DepreciationCheck with your accountant to see if your eligible for depreciation tax credits.
    Consider Buying UsedAre there any categories of supplies you can buy used, reconditioned, or
    get for free from sister businesses? Look online for opportunities to get gently used items.
    MaintenanceIs it possible to use equipment longer? Regular maintenance can save thousands.
    Educate your employees before problems arise.
    Eliminating MiddlemanIs it possible to use equipment longer? Regular maintenance can save
    thousands. Educate your employees before problems arise.
    UtilitiesSmall savings per month ends up being large savings per year.

    Cost reduction through


    Procurement strategies
    Customer
    Requiremen
    t Analysis

    Forecast
    Purchasing
    Requireme
    nts

    Supplier
    Identificatio
    n&
    Rationalisati
    on

    Identify All
    Suppliers for
    each type of
    cost and
    identify top 3
    suppliers

    Tender
    Process
    Negotiation

    Negotiate
    with
    suppliers
    Initiate
    performanc
    e reviews

    Selection &
    Approval

    Obtain
    feedback
    from
    Company
    to review
    costs.
    10

    11

    Effective Procurement
    Strategies
    Monitoring supply markets and trends.
    (e.g. material price increases, shortages,
    changes in suppliers) and interpreting the
    impact of these trends on company
    strategies
    Identifying the critical materials and services
    required to support company strategies in
    key performance areas, particularly during
    new product development
    Developing supply options and contingency
    plans that support company plans
    Supporting the organizations need for a
    diverse and globally competitive supply base

    12

    13

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