At its core, procurement refers to the process of obtaining goods or services from external sources. This process includes a wide range of activities, from determining the need for a product or service to negotiating contracts with suppliers and managing the delivery of the purchased items.
A procurement process comprises all activities associated with the purchase of goods and services by an organisation. It begins with the identification of needs and ends with the provision of goods or services. This process is essential to maintain and improve the operational performance of an organisation.
A product group refers to a categorization/classification of similar goods, products or services that are grouped together based on common characteristics, properties or uses. They play a fundamental role in organizing and managing procurement activities, enabling companies to effectively source and manage a wide range of items.
A purchase request is an internal document used in companies to communicate the need for goods or services. This document serves as a formal request from a department to the procurement department or management to purchase specific products or services, for example, this can be done through purchasing software.
A purchasing strategy is a systematic approach to optimising a company's procurement activities. It defines how a company can best procure the goods and services it needs in order to reduce costs and increase efficiency. The development of such a strategy requires a detailed analysis of expenditure and a precise knowledge of market trends.
RFX is a collective term for various types of documents used in the procurement process. These documents are RFi (Request for Information), RFp (Request for Proposal) and RFq (Request for Quotation). They are used to systematically compare and select offers from different providers.
Single sourcing is a procurement strategy in which a company purchases the goods or services it requires from just one supplier. This strategy is often chosen to simplify purchasing processes and build close relationships with suppliers. By focussing on one supplier, companies can often negotiate better conditions and simplify communication and quality management.
Source to Contract (S2C) is the process that covers strategic sourcing from the identification of a need to the conclusion of a contract. This process includes several steps such as market research, selection of suppliers, tendering and finally negotiation and signing of contracts and is often integrated in software.
Sourcing involves identifying, evaluating, selecting and managing suppliers or vendors to meet the needs and requirements of the business. It is a fundamental aspect of procurement and supply chain management and plays a critical role in ensuring that companies have access to the resources they need to operate efficiently and effectively.
Supplier Lifecycle Management is a strategic approach to managing supplier relationships, from initial onboarding to final offboarding. It includes a set of processes aimed at optimizing supplier performance, mitigating risk, promoting collaboration and maximizing value for companies and suppliers.
